US President Biden signed it earlierNew Executive Order, which will restrict U.S. businesses from investing in sensitive technologies such as semiconductors, quantum computing, and artificial intelligence in China.
The issuance of the new executive order is also based on national security considerations to prevent businesses in China from using US funding and technology to create technologies that affect national security. It also emphasizes that any investment, joint venture, or private equity and venture capital investment is prohibited.
However, this new executive order only restricts investments made after its issuance; existing investments will not be affected. Stock transactions conducted on the open market, or through asset transfers by U.S.-based businesses through subsidiaries, are also exempt from the new order. However, the U.S. government may still require businesses to disclose the details of existing investment transactions.
The Biden administration said the new executive order was decided after consulting with seven allies and will officially take effect in 7.
The ongoing Sino-US trade war has significantly reduced venture capital investment in China by US businesses, impacting many semiconductor companies that originally relied on the Chinese market for growth. While it remains unclear whether the new executive order will have a greater impact, it could also trigger retaliatory responses from the Chinese government.
