US tech-investment curbs have China gravely concerned, with already shrinking FDI looking even less attractive
- US President Joe Biden signed an executive order to restrict US venture capital and private equity stakes in Chinese firms in key areas, including semiconductors
- China’s Ministry of Commerce said the US restrictions were moves to ‘decouple and sever supply chains under the cover of eradicating national risks’
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Biden to introduce new restrictions on US investments in China, declares tech ‘emergency’
The latest “small yard, high fence” investment restrictions by the United States on China would choke venture capital and dwindle foreign direct investment inflows into the world’s second-largest economy, while also hitting its technological advancement, analysts said.
The latest restrictions are intended to curb US venture capital and private equity investments in Chinese companies covering semiconductors and micro electronics, quantum information technologies and certain artificial intelligence (AI) systems.
[The] US is defying its advocacy of maintaining the market economy with the principle of fair competition
China’s Ministry of Commerce responded on Thursday, saying the US restrictions were moves to “decouple and sever supply chains under the cover of eradicating national risks”.
“[The] US is defying its advocacy of maintaining the market economy with the principle of fair competition, affecting ordinary business decisions of companies, destroying international trade orders and seriously disrupting the safety of global supply chains,” the ministry said.
“China expresses grave concerns on this matter and we reserve the right to take measures regarding the situation.”
Washington, as part of the ongoing tech rivalry, has already blocked China’s access to core US-controlled technologies, including semiconductors, and halted grants from US hi-tech companies that produce “advanced chips” in China.