Politico reported that President Biden’s anticipated executive order on restricting US investments in China will not be as punitive as expected, prioritizing transparency over restriction.
According to Politico, the order will prevent US investments only in China’s semiconductor industry, but it is not expected to block US investments in any other tech sector in China.
Instead, the White House is considering only requiring US companies to inform federal authorities about their investment in other Chinese tech industries like quantum computing and artificial intelligence, sources familiar with the White House discussions told Politico.
However, the White House denied the sources’ characterizations of the ongoing discussion.
Saloni Sharma, a spokeswoman for the National Security Council, told Politico in a statement that the Biden administration is focused on “formulating an approach” that will address national security concerns from “outbound investments” in an effective and “implementable” manner that has a “greater impact” on Beijing’s efforts to obtain “sensitive capabilities” while allowing American companies to compete.
But Politico reports that the anticipated executive order amounts to a retreat from the more stringent approach White House officials and lawmakers had discussed last year, signifying that the Biden administration is abandoning the focus on damaging China’s tech industry.
What’s more, backing off plans to crack down on US investments in China’s tech industry as a whole could hinder the move to separate, or “decouple,” US and Chinese firms, Politico reported.
Eric Sayers, formerly of the US Indo-Pacific Command during the Trump administration, told Politico that administration officials and lawmakers who take a more hawkish approach to China will be “very disappointed” if Biden’s anticipated executive order fails to include language giving the federal government the “authority to reject deals” between US and Chinese companies.
The executive order is set to be issued in late March or early April, according to Politico. But if White House officials fail to reach an agreement in the ongoing discussions, it is possible the order could be delayed.