The Biden administration plans to restrict certain American investments in specific technology in Chinese industries.

President Joe Biden issued an executive order on Wednesday prohibiting Americans from making investments in specific technology in Chinese industries, citing the possibility that such transactions would lead to the development of military or intelligence capabilities.

The Treasury Department will have unprecedented new federal monitoring of investments made by American companies under new rules outlined in an executive order released by President Biden on Wednesday. The goal is to prevent American funding from aiding China’s military modernization, which could endanger the US.

The regulations won’t go into effect for at least a year, and before they are finalized, there will be a public comment process during which businesses and other organizations can voice their opinions.

In accordance with the Treasury Department, Biden’s executive order will classify China as a “country of concern” and restrict American investment in three national security technology in Chinese sectors which includes specific artificial intelligence systems, quantum information technologies, and semiconductors and microelectronics.

According to the Senior Administration Officials, the initiative was motivated by national security objectives rather than economic reasons, and the categories it covered were purposefully limited in scope.

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Officials in the Biden administration have emphasized that they are not interested in separating from China.

In a briefing on Wednesday, Senior Administration Officials pointed out numerous times that the United States remained committed to capital investment between the two largest economies in the world. 

China was very disappointed by the decision of restricting the technology in Chinese industries, according to Liu Pengyu, a spokesman for the Chinese Embassy in Washington. 

The most recent restrictions on the technology in Chinese businesses, according to Liu, will significantly jeopardize the interests of Chinese and American companies and investors, impede the two countries’ regular business cooperation, and reduce international trust in America’s business environment.

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