The White House is set to make a highly anticipated announcement regarding an executive order that will limit U.S. investment in certain advanced industries in China, such as quantum computing, semiconductors, and artificial intelligence.
An Awaited Announcement
This significant news is expected to be revealed later today, heightening tensions between the two nations. The order will specifically focus on venture capital and private-equity investments, imposing stricter disclosure requirements for American companies investing in various Chinese businesses.
Nurturing Contact Amidst Growing Challenges
The relationship between the U.S. and China has been undergoing attempts at rebuilding, but this executive order might complicate these efforts. Janet Yellen, the Treasury Secretary, discussed the forthcoming order during her visit to China in July, which triggered concerns among Chinese officials. It is crucial to note that Secretary Yellen emphasized the precise targeting of any measures taken.
Conflicting Perspectives on Trade Measures
China has consistently argued that recent trade measures implemented by the U.S. primarily aim to undermine its burgeoning tech industries. The Biden administration, citing national security concerns, has already imposed limitations on the sale of processor chips and other technological products to China.
Simultaneously, China has retaliated by banning Chinese companies from acquiring goods from American memory chip manufacturer Micron Technology (ticker: MU). Furthermore, the country has imposed export restrictions on gallium and germanium—essential minerals used in the production of semiconductors and solar panels.
Analyzing Venture Capital Investments
In parallel, lawmakers in the House have initiated investigations into the investment activities of venture-capital firms in Chinese companies. The House Select Committee on the Chinese Communist Party aims to scrutinize investments in technologies that could potentially pose a threat to the United States.
