US Limits Investments to Stop China's Military Tech Boom

The U. S. Treasury Department has implemented a new rule to curb American investments in China's advanced tech sectors like AI, computer chips, and quantum computing. This rule, resulting from President Joe Biden's August 2023 executive order, aims to restrict China's military advancements. The rule, effective January 2, 2024, targets countries deemed as concerns, specifically China, Hong Kong, and Macao. It not only limits financial investments but also monitors and blocks intangible benefits like managerial support and talent acquisition. This move has bipartisan support in Washington. Biden has previously taken actions such as imposing tariffs on Chinese electric vehicles and export controls on advanced chips. Former President Donald Trump has also threatened higher taxes on Chinese imports. China has protested the latest action, with their Foreign Ministry spokesperson expressing strong opposition. Hong Kong's leader warned that the move could disrupt global supply chains. The Treasury will oversee these investments through a new Office of Global Transactions. Violators can face fines up to $368, 136 or twice the transaction value, whichever is higher. Consultations with businesses and U. S. allies preceded the final rule.