China’s international trade council has formally appealed to the United States to reconsider the rules that impose bans or restrictions on U.S. investments in China’s technology sector. This request comes in response to an executive order signed by U.S. President Joe Biden last month, which restricts investments in Chinese entities involved in semiconductors, microelectronics, quantum information technologies, and specific artificial intelligence systems.
The China Council for the Promotion of International Trade, supervised by the Ministry of Commerce, argued that the executive order contains “vague and broad restrictions” on investors and transaction types without distinguishing between military and civilian purposes. They believe that this approach not only introduces transaction risks and compliance costs but also disrupts the highly interconnected global industrial chain.
President Biden’s executive order was motivated by national security concerns and the aim to prevent U.S. capital from inadvertently supporting China’s military endeavors.
Financial firms in the United States had been asked to provide input on these rules by September 28. They are advocating for greater clarity in the proposed regulations, which they consider too ambiguous and place a substantial compliance burden on investors. These rules are anticipated to be implemented sometime next year.
The appeal by China’s trade council underscores the complexities and potential global ramifications of restricting investments in the tech sector as the world grapples with the intertwined nature of technology, security, and international trade.
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