Biden plan to curb China investments focuses EU minds as deadline looms

European officials are taking a fine-tooth comb to last week’s executive order, with some relief that it is ‘narrower’ than expected

Without a multilateral approach, experts warn dollars banned from funding Chinese hi-tech development could be replaced with euros

4-MIN READ4-MIN

Washington has been urging the EU for some years to restrict investments in China’s hi-tech sectors. Photo: Shutterstock

Published: 10:00pm, 19 Aug 2023

As European officials slowly trickle back from summer holidays, the latest US move to curb investments in China will be burning a hole in their in-boxes.

In Brussels, some early returnees are already taking a fine-tooth comb to last week’s executive order, mindful of the arduous task the European Commission faces in pulling together its own outbound investment screening initiative by the end of the year.

While there is no immediate strategy to replicate US President Joe Biden’s plan, there is some relief among senior officials that it is “much narrower” than expected. Earlier legislative proposals were seen as more hawkish, and there is hope that this one could be clarified even further before it comes into force.

“We want to protect our European citizens and businesses from risks that could arise from sensitive technology and investments flowing out in a way that can threaten international peace and security,” said EU trade spokeswoman Miriam Garcia Ferrer.

“We are in close contact with the US administration and look forward to continued cooperation on this topic,” Ferrer said.

Experts say that if Biden’s plan to block venture capital and private equity flowing into China’s semiconductors, quantum computing and artificial intelligence sectors is to work, it is essential that partners are on board – otherwise banned dollars could be theoretically replaced with euros.