The Biden administration has established rules to restrict trade and investment in Chinese AI technology and other areas that could threaten national security, to come into effect in January 2025.
The final regulations of President Joe Biden's
Treasury Issues Regulations to Implement Executive Order Addressing US Investments in Certain National Security Technologies and Products in Countries of Concern | US Department of the Treasury
https://home.treasury.gov/news/press-releases/jy2687
FACT SHEET: Addressing US Investments in Certain National Security Technologies and Products in Countries of Concern | The White House
https://www.whitehouse.gov/briefing-room/statements-releases/2024/10/28/fact-sheet-addressing-us-investments-in-certain-national-security-technologies-and-products-in-countries-of-concern/
McHenry Statement on Treasury's Outbound Investment Final Rule | Financial Services Committee
https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409401
The Outbound Order prohibits Americans from engaging in transactions with persons of 'countries of concern' involving technologies or products that pose particularly significant national security threats to the United States, and requires Americans to notify the Treasury Department of any transactions with persons of countries of concern regarding technologies or products that may pose national security threats.
The technologies and products covered are three areas: semiconductors & microelectronics, quantum information technology, and AI.
President Biden has designated China, Hong Kong, and Macau as countries of concern and has made it clear that the final rules will take effect on January 2, 2025.
According to CSET, a think tank specializing in national security, between 2015 and 2021, American investors poured $40.2 billion (about 6.15 trillion yen) into 251 Chinese AI companies, accounting for 37% of the amount raised by all Chinese companies working on AI.
However, the White House pointed out that while cross-border investment and America's open investment policies contribute to our economic vitality, countries of concern may exploit them to accelerate the development of sensitive technologies and products that undermine our national security interests. The Biden-Harris Administration is committed to protecting our national security by preventing a country of concern, namely China, from advancing key technologies essential to its military modernization, the White House said, explaining the significance of putting the rules into effect.
Paul Rosen, Assistant Secretary of State for Investment and Security, commented through a Treasury Department release, 'The Biden-Harris Administration is committed to protecting America's national security and keeping critical advanced technologies out of the hands of those who could use them to threaten our national security. AI, semiconductors, and quantum technologies are fundamental to the development of next generation military, surveillance, intelligence, and certain cybersecurity applications, such as cutting-edge code-breaking computer systems and the next generation fighter jet. This final rule is a targeted, concrete step to ensure that American investments are not misused to advance the development of these critical technologies.'
In announcing the rules, House Financial Services Committee Chairman Patrick McHenry said, 'The most prominent advocate of restricting U.S. investment in China is, of course, Xi Jinping. This final rule is a targeted effort to cut off funding for the Chinese Communist Party's military and surveillance complex. I appreciate the Treasury Department's efforts to focus on military technologies.'
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