US blocks billions of dollars in overseas technology investment, China 'vows' to respond

China's ambassador to Washington said the country would definitely take countermeasures if the US continued to impose further restrictions on the semiconductor sector.

Ambassador Xie Feng said China is not afraid of competition but needs a fair game, not one where the US unilaterally sets rules. Beijing is currently banned from importing advanced chipmaking equipment by Washington.

In addition, the White House is considering imposing additional foreign investment review mechanisms and AI chip restrictions on China.

US Treasury Secretary Janet Yellen during a visit to China in early July. Photo: Reuters

The Biden administration is in the final stages of issuing an executive order that would limit certain types of foreign investments, such as advanced semiconductors, quantum computing and artificial intelligence.

A similar bill was introduced in parliament in 2021 but failed to pass. According to Reuters, the new proposal requires notification of some overseas investments instead of considering banning certain transactions and is narrower in scope.

“China will definitely react. We do not want a technology war or an iron curtain between the two sides,” Xie Feng said in a statement.

In May, China's cybersecurity agency announced that US chipmaker Micron Technology failed a security assessment, banning domestic critical infrastructure companies from using the brand's products.

In early July, US Treasury Secretary Janet Yellen made a four-day visit to China, meeting with many senior Beijing officials, including Premier Li Qiang and Pan Gongsheng, party secretary of China's central bank.

During the visit, the US finance chief took a flexible stance when he reaffirmed that Washington was not seeking to isolate the world's second largest economy, saying that "it would be a disaster for both sides and would make the world unstable".

But within the United States, bipartisan lawmakers are proposing to empower the government to block billions of dollars of investment flowing into the mainland. Lawmakers aim to complete the legal process for the new order by early September.

As for export restrictions, Yellen asserted that any new investment regulations (if any) would be “highly targeted, clearly oriented, narrowly focused on specific areas of national security concern” to avoid unintended consequences.

(According to Reuters)

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