Biden Selects Technologies for China-Bound Investment Bans

President Biden issued an executive order on Aug. 9 that authorizes the Treasury Department to bar U.S. persons from investing in companies in China developing technologies with military, intelligence, or surveillance applications in the specific areas of semiconductors and microelectronics, quantum information technologies, and artificial intelligence.

The White House framed the move as part of a “small yard, high fence” strategy, noting that prohibitions on investments will be limited to subcategories of each of the three technology areas that “pose the most acute national security risks.”

The Treasury Department is now collecting input until Sept. 28 on how to implement the investment restrictions, including what particular technology subcategories they will apply to. Investments in areas deemed less risky will not be prohibited but may trigger a requirement that they be disclosed to the department.

The Senate has proposed creating such a disclosure requirement via this year’s National Defense Authorization Act that would apply to a broader set of technologies and to investments in any entities with certain connections to “countries of concern,” but stopped short of creating a prohibition mechanism.