The White House administration has proposed a decree that would impose restrictions on direct investments in high-tech Chinese companies. These restrictions would apply to companies whose income is primarily derived from quantum calculations, the development of artificial intelligence, and advanced semiconductors. According to reports from The Wall Street Journal, The New York Times, and Bloomberg, the American authorities argue that these measures are necessary for national security and would not go into effect before 2024. However, existing investments from the United States would not be affected by these restrictions.
According to information from the WSJ, the new rules would technically also apply to investments in companies from several other countries, including Russia, but the main impact would be felt by China. Private and venture investors from the US would be prohibited from investing in Chinese companies involved in quantum cryptography, artificial intelligence, and advanced semiconductors. However, there is information suggesting that a complete ban on investments in the artificial intelligence sector would only apply to Chinese companies that supply military products, and in other cases, governments would need to be notified. There may be exceptions in the field of quantum calculations and chips. Investors who violate these rules would face fines and an order to divest their shares. The new rules, as reported by the WSJ, are irrevocable and do not affect portfolio investments in Chinese stocks and bonds.
According to Bloomberg, the new restrictions would essentially only impact investments in Chinese startups and would not significantly affect American investors planning to collaborate with large Chinese corporations. The main aim of the White House with these restrictions may be to prevent new competitors from emerging in the advanced technologies sector. Anonymous sources suggest that these restrictions are targeting the flow of American investments in sectors that could benefit the Chinese military or state surveillance agencies.
The New York Times suggests that this new move by the American authorities is likely to provoke a strong reaction from China. In February 2023, Reuters published data from the Center for Security and New Technologies (CSET) at Georgetown University, indicating that American investors had poured $40.2 billion into the Chinese artificial intelligence sector from 2015 to 2021, accounting for 37% of total investments in Chinese AI technologies.