Biden hopes to tighten US investment rules in China

WILMINGTON, Del. — WILMINGTON, Del. (AP) — The Biden administration is poised to tighten rules on some overseas investments by U.S. companies in an effort to limit China’s ability to acquire technologies that could improve its military capabilities, according to a US official familiar with the deliberations.

A soon-to-be-released executive order from President Joe Biden will limit American investment in advanced technologies with national security applications — such as next-generation military capabilities that help China improve speed and precision in military decision-making, according to the official, who was not authorized to comment and spoke on condition of anonymity.

The expected action is the latest effort by the White House to target China’s military and technology sectors at a time when relations between the world’s two largest economies are straining.

In October, the Biden administration imposed export controls to limit China’s ability to access advanced chips, which it says could be used to make weapons, perpetrate human rights abuses and develop of speed and precision in military logistics.

The complicated relationship has been strained in recent weeks after the US shot down a Chinese spy balloon last month that flew over the country. The Biden administration also announced U.S. intelligence findings that raised concerns that Beijing was weighing arming Russia for its ongoing war in Ukraine.

Tensions were on display as top diplomats from the Group of 20 industrialized and developing nations wrapped up a contentious meeting in New Delhi on Thursday with no consensus on the war in Ukraine and concerns about China’s growing global influence dominated much of the talk.

On the other hand, China this past week blasted the new House Select Committee of the Chinese Communist Party after it held the first hearing to counter Beijing’s influence. Foreign Ministry spokesman Mao Ning asked its members to “put aside their ideological bias and zero-sum Cold War mentality.”

Administration officials are consulting with allies as they work to craft new U.S. investment regulations, according to the official.

The Wall Street Journal first reported Saturday that the Treasury and Commerce departments delivered reports to lawmakers Friday detailing plans for a new regulatory system to address investment outside the U.S. in advanced technology. The agencies said they hope to find more money for the investment screening program in the White House budget, which is scheduled to be released on March 9, according to the Journal.

A spokesman for the White House National Security Council declined to comment on the Treasury and Commerce reports, but noted that administration officials continue to inform Congress of its progress in developing a policy on foreign investment.

The expected action is sure to face pushback from US companies. Administration officials are seeking to signal to the business community that although they are looking at scrutinizing US investment rules in China, they are mindful not to overdo it.

“One of the most important things we can do, from my perspective, is make sure we draw clear lines between what is competition and what is national security because, basically, my view is that the United States is good if we compete. on a level playing field with any country in the world,” said Deputy Treasury Secretary Wally Adeyemo at a recent event at the Council on Foreign Relations. “But we also want, in the narrow areas where we see a risk to national security, to use the tools at our disposal to protect the national security of the United States of America.”

A bipartisan group of lawmakers last year urged Biden to establish a stricter screening system for foreign investment with China at the forefront.

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