A U.S. Treasury official has revealed that new regulations are being considered to restrict the flow of American investments and expertise into Chinese companies involved in advanced semiconductors, artificial intelligence, and quantum computing. Paul Rosen, who oversees investment security at the Treasury, stated during a Senate Banking Committee hearing that efforts are underway to curb investment that brings know-how and expertise in specific sectors such as advanced semiconductors, artificial intelligence, and quantum computing, with a particular focus on China and its military.
Earlier reports in February had indicated that the Biden administration intends to ban investments in certain Chinese technology companies and increase scrutiny on others as part of its strategy to clamp down on the significant amount of capital that American firms have invested in sensitive Chinese sectors. U.S. investors have been criticized by China hawks in Washington for transferring capital and valuable knowledge to Chinese tech firms that could potentially aid Beijing’s military advancements.
During the hearing, Republican Senator Bill Hagerty inquired about efforts to restrict the supply of U.S.-origin goods to Chinese telecommunications company Huawei. The export of goods to Huawei currently requires a license. Thea Rozman Kendler, Assistant Secretary at the Commerce Department, stated that there is currently no draft rule regarding the revocation of these licenses but confirmed that the issue is under thorough analysis.
Officials are closely monitoring a wide range of exports to China and have reported that in the previous year, approximately 25% of requests were denied or received no action in order to prevent sales that could contribute to Beijing’s military build-up. In 2022, a total of 5,064 export and re-export license applications were reviewed, with roughly 26% being denied or returned without action, according to Kendler’s written testimony submitted ahead of the Senate Banking Committee hearing.
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