Treasury issues rule to block US investors from helping China develop
advanced military technology
Send a link to a friend
[October 29, 2024] By
PAUL WISEMAN
WASHINGTON (AP) — The U.S. Treasury Department, seeking to keep the
Chinese military from gaining an edge in advanced technologies, issued a
rule Monday to restrict and monitor American investments in China in
artificial intelligence, computer chips and quantum computing.
The finalized rule arises from an executive order issued in August 2023
by President Joe Biden. The order sought to limit the access that
"countries of concern'' — specifically China including Hong Kong and
Macao — have to American dollars to fund technologies that could be
used, for example, to break codes or develop next-generation fighter
jets. It will take effect Jan. 2.
“U.S. investments ... must not be used to help countries of concern
develop their military, intelligence and cyber capabilities''' said Paul
Rosen, assistant Treasury secretary for investment security. He noted
the investments can mean more than just money: they can deliver
”intangible benefits,'' including managerial help and assistance finding
top talent and tapping other sources of financing.
Blocking China's high-tech ambitions is one of the few issues that
enjoys broad support in Washington from both Republicans and Democrats.
Biden in May slapped a stiff tariff on electric vehicles from China. He
also has imposed export controls to keep the Chinese from acquiring
advanced computer chips and the equipment to produce them. Former
President Donald Trump has vowed to dramatically increase taxes on all
imports from China if voters send him back to the White House.
A Chinese Foreign Ministry spokesperson said Tuesday that the government
had lodged a protest with the U.S. over the latest action.
[to top of second column] |
The Treasury Building is viewed in Washington, May 4, 2021. (AP
Photo/Patrick Semansky, File)
“China strongly deplores and firmly
opposes the U.S. rolling out restrictions on investment in China,”
Lin Jian said at a daily briefing in Beijing.
In Hong Kong, the city's leader said the move undermined normal
investment and trade and would cause damage to the global supply
chain.
“In pursuing their political agenda, American politicians are
harming not only others but also the interests of their own country,
their people and their businesses. They will have to face the
consequences of their actions,” John Lee said, noting that the U.S.
has enjoyed a trade surplus of $472 billion with Hong Kong in the
past 10 years.
The Biden administration sought comment from businesses and from
U.S. allies before putting out the final version.
In addition to blocking investments, the rule requires Americans and
companies in the United States to notify the U.S. government of
transactions that involve "technologies and products that may
contribute to a threat to the national security of the United
States.''
Violators can be hit with fines of up to $368,136 or twice the value
of the prohibited transaction, whichever is greater. Treasury is
setting up an Office of Global Transactions to oversee the new rule.
____
Associated Press writers Ken Moritsugu in Beijing and Kanis Leung in
Hong Kong contributed to this report.
All contents © copyright 2024 Associated Press. All rights reserved |