Active Stocks
Fri Apr 12 2024 15:57:45
  1. Tata Steel share price
  2. 163.50 -1.00%
  1. NTPC share price
  2. 362.00 -0.32%
  1. ITC share price
  2. 430.10 -1.56%
  1. HDFC Bank share price
  2. 1,518.90 -1.10%
  1. State Bank Of India share price
  2. 766.75 -1.57%
Business News/ News / World/  To stop US investors from funding Chinese companies, Biden administration is coming up with new rules
BackBack

To stop US investors from funding Chinese companies, Biden administration is coming up with new rules

Sectors that could advance China’s military capabilities would be a focus of the new rules.

President Joe Biden speaks in Selma, Ala., Sunday, March 5, 2023, to commemorate the 58th anniversary of “Bloody Sunday,” a landmark event of the civil rights movement. (AP Photo/Julie Bennett) (AP)Premium
President Joe Biden speaks in Selma, Ala., Sunday, March 5, 2023, to commemorate the 58th anniversary of “Bloody Sunday,” a landmark event of the civil rights movement. (AP Photo/Julie Bennett) (AP)

The US administration is reportedly developing a new programme that could prohibit US participation in certain Chinese sectors. The move is seen as an attempt to protect American technological advantages in the escalating rivalry between the two countries.

People familiar with the programme expect it to cover private equity and venture capital investments in advanced semiconductors, quantum computing and some forms of artificial intelligence. The aim is to stop American investors from providing funding and expertise to Chinese companies that could improve the speed and accuracy of Beijing's military decisions.

According to reports provided to lawmakers on Capitol Hill on March 3, the US Treasury and Commerce departments are considering a new regulatory system to address US investment in advanced technologies abroad that could pose national security risks. The reports did not mention specific technology sectors that the Biden administration considered risky, but it was noted that sectors that could advance rivals' military capabilities would be a focus of the programme.

Also Read: China sending lethal aid to Russia, likely shift Ukraine war dynamics in Putin's favour

The programme would focus on "preventing US capital and expertise from being exploited in ways that threaten our national security while not placing an undue burden on US investors and businesses," according to the US Treasury department report.

The reports did not mention the names of countries that would be placed under the new rules, but it is expected that the Biden administration's work on the new rules would in practice largely deal with US investments in China.

The US Treasury and Commerce departments are expected to finalise their policy on the issue in the near future and seek additional resources for the investment programme in the White House budget, due to be released next week. The new programme will be subject to public comment, and the Treasury will administer it in consultation with the Commerce Department.

Also Read: ‘Proof of great friendship’: China to send Pakistan another $1.3 billion

The rules regulating US investment in other nations will be part of a broader effort by the Biden administration to impact China's ability to create technologies that US officials believe could pose a national security risk.

In 2022, the US government announced export restrictions on advanced semiconductors and chip-manufacturing equipment aimed at slowing China's military advance. The US government has been working on an executive order establishing the new investment rules for months.

US Deputy Treasury Secretary Wally Adeyemo recently said that Washington should set up the investment programme rules to address national security risks and not create unfair economic advantage. Adeyemo made the remarks at a recent public event.

(With ANI inputs)

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Sounak Mukhopadhyay
Sounak Mukhopadhyay, who also goes by the name Sounak Mukherjee, has been producing digital news since 2012. He's worked for the International Business Times, The Inquisitr, and Moneycontrol in the past. He's also contributed to Free Press Journal and TheRichest with feature articles. He covers news for a wide range of subjects including business, finance, economy, politics and sports. Before working with digital news publications, he worked as a freelance content writer.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 06 Mar 2023, 06:08 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App