- Biden warned in the executive order that some U.S. investments could contribute to “the development of sensitive technologies and products in countries that develop them to counter the U.S. and related capabilities.”
- China says the order “severely undermines the security of global industrial and supply chains”.
- Beijing is stopping short of immediately offering countermeasures, but said it “reserves the right” to respond.
Editorial photography illustrating smart city communication networks against the urban landscape in Shanghai.
Tang Wenji | moment | Good pictures
China has criticized President Joe Biden’s long-awaited executive order Regulating new U.S. investment in technology — but stopping short of issuing immediate countermeasures.
Hours after Biden signed measures targeting “countries of concern” on national security grounds, China’s Commerce Ministry issued a strong response early Thursday in Asia.
“China expresses its grave concern and reserves the right to implement measures,” the Chinese Ministry of Commerce said in the statement, as translated by CNBC.
Biden’s order comes amid a growing race for global tech supremacy. As opposed to an outright ban, the measures are aimed at restricting US investment and expertise in semiconductors and microelectronics, quantum computing and some artificial intelligence capabilities in China, Hong Kong and Macau.
“This seriously deviates from the principles of market economy and fair competition that the United States has always advocated,” the Chinese Ministry of Commerce added. “It affects the normal functioning and decision-making of institutions, undermines the international economic and trade order, and seriously undermines the security of global industrial and supply chains.”
In October, the US introduced sweeping rules aimed at curbing exports of key chips and semiconductor equipment to China, urging major chipmaking countries such as Japan and the Netherlands to do the same.
I think this will have a much broader chilling effect on technology transfers and investments by American companies in China.
Professor of Economics, Cornell University
“The message is very clear. Washington wants to use national security imperatives as a way to try to limit technology-related investments and technology transfers to China, because there’s not just a national security angle, but a very obvious, commercial angle as well,” said Cornell University’s international trade angle. Professor Ishwar Prasad told CNBC on Thursday.
“Including the new technologies covered by this executive order, the economic front between the United States and China is subject to very intense competition,” he added.
He said the executive order was “cast in a very narrow light.”
“Having said that, I think it will have a broad chilling effect on technology transfers and investments by American companies in China,” Prasad said.
— CNBC Evelyn Cheng contributed to this story.
This is a growing story. Check back for more updates.