The US government reportedly will announce details Wednesday on a plan to restrict American investments in cutting-edge technology including quantum computing and AI in China, media reports said. The plan is likely to apply to Chinese companies that obtain at least half of their revenues from those technologies.
Chinese experts said the US attempt to ramp up tech blockade against China is unlikely to change course, but the move will trigger a strong backlash from American investors and hurt the US in the end.
And, the move is unlikely to hold back Chinese tech ventures, which have accelerated self-reliance and innovation, and the country has other sources to help invest in high-tech, observers said.
The US government’s new restrictive plan is aimed at preventing US capital and expertise from helping develop technologies that could “support China’s military modernization and threaten US national security,” according to Reuters.
The restriction is likely to apply only to Chinese companies that obtain at least half of their revenues from the listed technologies like AI, Bloomberg reported.
“The strengthened attack on Chinese tech ventures shows no change in the US posture to stymie China’s tech advance, and the use of the investment restriction ban to put pressure on China before US Commerce Secretary Gina Raimondo reportedly plans to visit China in late August makes no sense,” Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Wednesday.
The investment restrictions, postponed on several occasions, are not expected to take effect right away, according to a report by Reuters.
“The change in limiting the scope of restriction showed US tech companies’ opposition to cutting ties with the Chinese market,” He Weiwen, an executive council member of the China Society for World Trade Organization Studies, told the Global Times on Wednesday.
Bloomberg reported earlier that the limit angered US chip firms including Intel and Nvidia, which pin hope on China’s huge market to drive revenue growth. Their CEOs were in Washington for a last-ditch effort to lobby White House not to go beyond existing curbs.
The provision on revenues means that Chinese companies most affected by the limits will be early-stage Chinese start-ups. The administration wants to make sure American investors aren’t helping Chinese companies develop technology and outpace the US, Bloomberg said.
“The ban will have a temporary and limited impact on Chinese firms, as they are already facing various assaults from the US government,” Li said.
Some US companies will not abandon the Chinese market, He noted, adding that Chinese enterprises can instead seek investment from other countries and regions.
In response to questions about the reported plan, Chinese Foreign Ministry spokesperson Mao Ning said earlier that China opposes the US politicizing and weaponizing trade and technology issues. It is in no one’s interest to place arbitrary curbs on normal tech cooperation and trade, which violates the principles of market economy, and destabilize global industrial and supply chains.
In addition, Li said that China will counteract US unilateralism and the disruption of normal investment and trade practices according to international rules.
Trade between the world’s top two economies has kept declining, Chinese customs data showed on Tuesday. Bilateral trade reached 2.64 trillion yuan ($366 billion) in the January-July period, down 9.6 percent year-on-year.
The figure accounted for 11.2 percent of China’s total foreign trade, making the US the third-largest trading partner of China, after ASEAN and EU.
(Global Times)
