Biden Signs An Executive Order Limiting Us Technological Investments In China.

Biden sings an executive order restricting U.S. investments in Chinese technology

President Joe Biden signed an executive order on Wednesday that would ban and regulate high-tech U.S.-based investments flowing to China as an indication of the escalating tensions between the two superpowers. Artificial intelligence, microelectronics, quantum information technology, and sophisticated computer chips are all covered.

Senior administration officials claimed that the effort's motivation was constrained in scope and was driven by national security objectives rather than economic ones. The directive aims to maintain higher levels of trade that are essential for the economy of both countries while limiting China's capacity to exploit U.S. investments in its technology companies to improve its military.

Along with their close trade ties as the two biggest economies in the world, the United States and China look to be embroiled in a geopolitical battle that is becoming more intense. Despite the Biden administration's insistence that it has no interest in "decoupling" from China, the United States has restricted the sale of sophisticated computer chips, sought to restrict investments there, and maintained the enhanced tariffs President Donald Trump had imposed.

According to Biden, as the United States has reactivated its ties with Japan, South Korea, Australia, and the European Union, China's economy is sputtering and its ambitions to dominate the world have been scaled down. The executive order was developed after consultation with industry and friends by the administration.

Following the American shooting down of a Chinese spy balloon that was flying above the United States, Biden referred to Chinese President Xi Jinping as a "dictator" A topic of contention has been Taiwan's position; Biden claimed that China has turned coercive in regards to Taiwan's independence.

Although Biden has underlined that the friendship has not extended to the sale of arms, China has supported Russia since its invasion of Ukraine in 2022.

The impending executive order on investing in China has been hinted at by U.S. officials for some time, but it's uncertain if the financial markets would view it as a tapering move or as a continuation of tensions rising at a delicate time.