WASHINGTON – The Treasury Department on Friday introduced a proposed rule that would restrict and monitor U.S. investments in China in artificial intelligence, computer chips and quantum computing.
The proposed rule stems from President Joe Biden’s August 2023 executive order in relation to access that “countries of concern” They need US dollars to fund advanced technologies, which the US government claims would improve their military, intelligence, surveillance and cyber capabilities. The order identified China, Hong Kong and Macau as countries of concern.
The Biden administration has sought to prevent the development of technologies by China, the world’s second-largest economy, that could give it a military advantage or allow it to dominate emerging sectors such as electric vehicles.
In addition to the proposed rule, Democrat Biden also put a strict tariff on Chinese EVsan issue with political implications, as the president and Republican Donald Trump try to show voters who can best confront China, a geopolitical rival and important trading partner.
The proposed rule outlines the required information that U.S. citizens and permanent residents must provide when transacting in this area, as well as what would be considered a violation of the restrictions.
It would specifically prohibit American investors from financing 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 under condition of anonymity.
Treasury is seeking comments on the proposal by August 4, 2024, after which it is expected to issue a final rule.
Biden administration officials, including Treasury Secretary Janet Yellen, have insisted they have no interest in “decoupling” from China — however, tensions between the two nations have risen in recent years.
After the US military in February 2023 shot down an alleged Chinese spy balloon off the coast of Carolina After crossing sensitive military sites across North America, China threatened repercussions.
Since then, there have been regular incidents between the two nations based on national security concerns.
For example, Biden in May issued an order blocking a Chinese-backed cryptocurrency mining company from owning land near a nuclear missile base in Wyoming, calling its proximity to the base a “national security risk.”
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Associated Press reporter Fatima Hussein contributed to this report.
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