WASHINGTON (AP) — The Treasury Department on Friday detailed a proposed rule that would limit and monitor U.S. investments in China for artificial intelligence, computer chips and quantum computers.
The proposed rule follows President Joe Biden’s August 2023 executive order regarding access that “countries of concern” have to U.S. dollars that fund advanced technologies that the U.S. government says will enhance their military, intelligence, surveillance – and increase cyber capabilities. The order identified China, Hong Kong and Macau as countries of concern.
The Biden administration has sought to hinder the development of technologies by China, the world’s second-largest economy, that could give the country a military edge or allow it to dominate emerging sectors such as electric vehicles.
In addition to the proposed rule, Democrat Biden has also slapped a stiff tariff on Chinese electric cars, an issue with political implications as the president and Republican Donald Trump both try to show voters who can best stand up to China, a geopolitical rival and great rival. trading partner.
The proposed rule outlines the required information that U.S. 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 would specifically ban U.S. investors from funding AI systems in China that could be used for targeting weapons, tracking combat and location tracking, among other military applications, according to a senior Treasury Department official who has reported a previewed the rule for reporters on condition of anonymity.
The Treasury Department is seeking comment on the proposal through August 4, 2024, and is expected to issue a final rule after that.
Biden administration officials, including Treasury Secretary Janet Yellen, have emphasized that they have no interest in a “decoupling” from China — but tensions between the two nations have increased in recent years.
After the US military shot down a suspected Chinese spy balloon off the Carolina coast in February 2023 after it crossed sensitive military sites in North America, China threatened repercussions.
Since then, incidents have occurred regularly between the two countries based on national security concerns.
For example, Biden issued an order in May banning a Chinese-backed cryptocurrency mining company from owning land near a nuclear missile base in Wyoming, calling the base’s proximity a “national security risk.”
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Associated Press reporter Fatima Hussein contributed to this report.
