The United States has released proposed regulations that would prohibit or require notice of specific Chinese investments in artificial intelligence (AI) and other technological fields which could jeopardize US national security.
The August executive order, released last week, by President Joe Biden about ‘countries of concern’ having access to US cash to finance cutting-edge technology that may improve their military, intelligence, surveillance, and cyber-capabilities is the source of the draft regulation.
According to the Associated Press, China, Hong Kong and Macau were designated as nations of concern in the directive. The executive order signed by Biden directed the regulation of specific US investments in semiconductors and microelectronics, AI and quantum computing. This order is a part of a larger effort to stop US competence from assisting China in developing cutting-edge technology and controlling international markets.
The Biden administration has worked to block China’s development of technology that may provide it a military advantage or allow it to control new markets like EVs since China is the second-largest economy in the world. The US is likely to enact rules by year’s end and the public feedback on the draft regulations is accepted by August 4.
Spotlight on China, Hong Kong and Macau
Syndicated debt financings, buyouts of country-of-concern ownership, transactions between a US parent company and a majority-controlled subsidiary, publicly traded securities like index funds and mutual funds, certain limited partnership investments, and binding commitments that predate the order are among the other exceptions that might apply.
US Treasury stated that some transactions involving third countries that were found to be resolving issues related to national security or in which the third country sufficiently resolved the issues related to national security would potentially be excluded. The order first targets China, Macau and Hong Kong, but according to US authorities, its scope may change in the future.
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