The Biden administration is preparing to issue an executive order that would tighten rules on some overseas investments by U.S. companies, in an effort to curb China's access to technologies that could improve its military capabilities. According to an anonymous U.S. official, the order will restrict American investment in advanced technologies with national security applications, including next-generation military capabilities that could help China improve the speed and accuracy of military decision-making. This latest move follows the Biden administration's October 2021 export controls to limit China's access to advanced chips.
Tensions between the U.S. and China have increased in recent weeks after the U.S. shot down a Chinese spy balloon and publicized intelligence findings suggesting that China may provide weaponry to Russia for its ongoing war in Ukraine. The relationship was further strained as top diplomats from the Group of 20 failed to reach consensus on the Ukraine war during a contentious meeting in New Delhi.
The Treasury and Commerce departments recently delivered reports to lawmakers detailing plans for the new regulatory system to address U.S. overseas investment in advanced technologies. While the expected action is certain to face pushback from U.S. firms, the administration seeks to draw clear lines between competition and national security, using tools to protect the national security of the United States. A bipartisan group of lawmakers had previously urged Biden to establish a tougher screening system for investments in foreign adversaries, with China being top of mind.
