The United States Department of the Treasury has fleshed out a proposed rule that would restrict and monitor US investments in China for artificial intelligence, computer chips and quantum computing.
The fleshed-out draft rule, issued on Friday, stems from President Joe Biden’s August executive order regarding the access that “countries of concern” have to American dollars to fund advanced technologies that could enhance those nations’ military, intelligence, surveillance and cyber-capabilities. The order identified China, Hong Kong and Macau as countries of concern.
The Biden administration has sought to stymie the development of technologies by China, the world’s second largest economy, that could give it a military edge or enable it to dominate emerging sectors such as electric vehicles (EVs).
In addition to the proposed rule, Biden, a Democrat, has also placed a stiff tariff on Chinese EVs, an issue with political implications as Biden and his Republican presidential opponent Donald Trump are both trying to show voters who can best stand up to China, a geopolitical rival and major trading partner.
The proposed rule outlines the required information that US citizens and permanent residents must provide when engaging in transactions in this area as well as what would be considered a violation of the restrictions.
It specifically would prohibit American investors from funding AI systems in China that could be used for weapons targeting, combat and location tracking, among other military applications, according to a senior Treasury official who previewed the rule for reporters on the condition of anonymity.
