Supply Chain

U.S. Treasury Department Finalizes Ban on Investment in China

U.S. Treasury Department Finalizes Ban on Investment in China

Sedat Onat
U.S. Treasury Department Finalizes Ban on Investment in China

The U.S. Treasury Department has finalized a rule prohibiting investments in China's semiconductors, artificial intelligence, and quantum computing sectors on national security grounds. Deputy Treasury Secretary Paul Rosen stated in an October 28 announcement, "The Biden-Harris Administration is committed to protecting America's national security and preventing critical advanced technologies that could threaten our national security from falling into the wrong hands. Artificial intelligence, semiconductors, and quantum technologies are foundational to the development of the next generation of military, surveillance, intelligence, and certain cybersecurity applications."

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Chinese leaders, however, are firmly opposed to the decision. Hong Kong Chief Executive John Lee stated in a briefing on October 29 that the measure would "harm the global supply chain." Chinese Foreign Ministry spokesperson Lin Jian said in a separate briefing that the government "strongly and categorically rejects" the new regulations.

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The regulation, referred to as the "Final Rule," implements an executive order issued by President Biden in August 2023 and will take effect on January 2, 2025. The regulation will effectively prohibit U.S. individuals and companies from investing in certain technology sectors in China and will require them to notify the U.S. government for investments in certain technologies, such as legacy electronic components.

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Key Points:
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  • The U.S. Treasury Department has finalized a ban on investment in China's semiconductors, artificial intelligence, and quantum computing sectors.

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  • The ban is justified on national security grounds.

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  • The Chinese government and leaders responded harshly to the decision, arguing it would harm the global supply chain.

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  • The regulation is part of President Biden's executive order from August 2023 and will take effect on January 2, 2025.

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  • U.S. individuals and companies will be unable to invest in certain technology sectors and will need to notify the government for certain investments.

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News Link: https://www.supplychainbrain.com/articles/40588-china-claims-new-rule-barring-us-tech-investments-will-harm-global-supply-chain

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