The Treasury Department has implemented a new rule to prevent U.S.-based individuals and companies from investing in advanced technologies in China. The rule, set to take effect on January 2, will focus on advanced semiconductors, microelectronics, quantum computing, and artificial intelligence systems. Transactions related to these technologies will be prohibited, with mandatory reporting requirements for transactions that are not outright banned.
The rule aims to prevent the exploitation of U.S. investment to advance the development of key technologies by those who may threaten national security. While the Chinese government has protested against the rule, the U.S. views it as necessary to protect its interests and prevent the transfer of advanced technologies to China.
The ban on transactions applies to companies and individuals doing business in mainland China, Hong Kong, and Macao, and targets intangible benefits as well. U.S. companies will be responsible for complying with the rule, signaling the need to reconsider investments that could enhance China’s capabilities in critical technological areas.
The rule also addresses concerns about U.S. investment firms supporting Chinese firms in developing technologies with military implications. It aims to close loopholes that allow the transfer of sensitive technologies to China. In particular, the U.S. government is concerned about preventing the leakage of quantum technology to China, which could have implications for encryption codes used in sensitive sectors.
Overall, the rule reflects U.S. efforts to safeguard national security and prevent the unauthorized transfer of advanced technologies to China, highlighting the importance of protecting critical intellectual property and maintaining technological leadership in key areas.
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