The US limits investments in semiconductors, AI and quantum technology in China

The US authorities have passed an executive order requiring Investors in the country have to obtain express authorization to invest in technology sectors in China that are considered sensitive. Thus, in fact, the United States will limit investment in areas such as semiconductor research and manufacturing, Artificial Intelligence and quantum technology. This order will go into effect in 2024, and in addition to being quite restrictive, it leaves the door open for increased restrictions in the future.

The executive order covers US investments in different national security technologies and products in countries considered to be of concern. At present, the only country considered as such is China, as well as its special administrative regions Honk Kong and Macao. In the statement approving the order, the authorities note that the countries of concern are engaged in comprehensive long-term strategies that directly facilitate, or otherwise support, advances in sensitive technologies that are critical to the military, intelligence or surveillance of those countries. Also for its capabilities related to the latest technological advances.

According to the White House, these countries blur the barriers between the civil, business, military and defense sectors. In addition, they use advances in semiconductors and microelectronics, as well as AI and quantum technologies, to enhance their capabilities for activities that threaten the national security of the United States. On the other hand, the US authorities point out that the countries classified as worrisome are taking advantage of certain US investments abroad, or have the capacity to do so.

This recently approved order will require Americans to notify the Treasury Department of any transaction made by a foreign entity controlled by Americans. These entities include arrangement, association, trust, joint venture, corporation, group, subsidiary, or any type of organization. After studying it, the authorities will decide whether to authorize it or not.

Of course, the order will affect future investments, not existing ones. The investment areas related to technology and R&D in which the order will be applied are considerably more than initially expected, and practically only those related to energy and biotechnology are saved.

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