Biden to tighten US investment regulations in China

U.S. Prepares New Rules on Investment in China

By Stermy 5 Min Read

According to an anonymous U.S. official familiar with the matter, the Biden administration is nearing the implementation of stricter regulations on certain foreign investments made by American companies.

The purpose of this move is to limit China’s access to technologies that could potentially enhance its military capabilities.


The executive order, set to be issued soon by President Joe Biden, will specifically restrict U.S. investment in advanced technologies with national security implications, including next-generation military capabilities that may assist China in enhancing its military decision-making accuracy and speed.

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This anticipated action is part of the White House’s continued efforts to target China’s military and technology industries amidst the escalating tensions between the two largest economies in the world.

In October, the Biden administration imposed export controls on advanced chips, which it believes could be used by China for weapons production, human rights abuses, and improvements in military logistics.

In recent weeks, the already complex relationship between the United States and China has become even more strained. Last month, the U.S. shot down a Chinese spy balloon that had flown over the country, adding to the growing tensions.

Additionally, the Biden administration has recently released intelligence reports that suggest China may be considering supplying Russia with weaponry for its ongoing conflict with Ukraine, further raising concerns.

The strained relationship between the United States and China was evident at a recent meeting of the Group of 20 industrialized and developing nations in New Delhi. Despite discussions on the ongoing war in Ukraine, concerns about China’s expanding global influence dominated the talks, leading to a lack of consensus among the top diplomats.

In the meantime, China criticized the newly-formed House Select Committee on the Chinese Communist Party following its first hearing on countering Beijing’s influence. Foreign Ministry spokesperson Mao Ning called for the committee members to abandon their ideological bias and Cold War mentality.

The Biden administration has been collaborating with its allies while developing new regulations on American investments. As per a U.S. official, the Treasury and Commerce departments recently presented lawmakers with reports outlining plans for a regulatory system that addresses U.S. investments in advanced technologies abroad.


The agencies plan to request additional funding for the investment screening program in the upcoming White House budget set to be released on March 9, according to The Wall Street Journal’s report published on Saturday.

A spokesperson from the White House National Security Council declined to provide any comments on the Treasury and Commerce reports. However, the spokesperson did mention that administration officials have been updating Congress on their efforts to develop an approach to overseas investment.

It is expected that the upcoming regulatory action will face opposition from American companies. Administration officials have tried to convey to the business community that even though they are looking to review the regulations governing U.S. investment in China, they are cautious not to exceed limits.

“One of the most important things we can do, from my perspective, is make sure that we draw clear lines between what is competition and what is national security because, fundamentally, my view is that the United States does well when we’re competing on a level playing field with any country in the world,” Deputy Treasury Secretary Wally Adeyemo said at recent Council on Foreign Relations event. “But we also want, in the narrow spaces where we see national security risk, be able to use the tools at our disposal to protect the national security of the United States of America.”

A bipartisan group of lawmakers last year urged Biden to establish a tougher screening system for investments in foreign adversaries with China being top of mind.

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By Stermy
Stermy is one Crazy fan of the word "Internet". Always online to stay informed and keep others updated. #townflex