China’s Foreign Ministry condemned an executive order by US President Joe Biden banning investments into sensitive high-tech segments, calling the latest move anti-globalisation.
In a press conference, Foreign Ministry representative Mao Ning accused the US of misrepresenting the concept of national security.
“Restricting US companies’ investments in China with national security as a front is a clear act of overstretching the concept of security and politicising business engagement.”
Mao added the real aim is to “deprive China of its right to develop”, calling the move “blatant economic coercion and tech bullying”, an act which violates the principles of market economy and fair competition.
The US executive order prohibits private equity, venture capital and joint venture companies from investing in China-based entities involved in developing advanced semiconductors, quantum information technologies and AI systems.
A US official stated the programme is narrowly targeted to ensure US capital does not “support indigenous foreign development of emerging and critical technologies with national security risks”.
With Chinese companies previously expecting the tighter US export rules, Financial Times reported Tencent, Alibaba, Baidu and ByteDance moved to stockpile supplies by placing orders with Nvidia worth $5 billion for GPUs to power AI systems.
Richard Windsor, founder of industry blog Radio Free Mobile, wrote while the official reason for the new US measures is to limit access to capital and technology by China’s military, “this looks like a fairly weak excuse for a much wider attack on China’s emergence as a world power”.
Despite previous US restrictions being effective, he believes the latest will have little impact because China’s policies combined with a crackdown on the tech sector have already “scaring almost all foreign capital away from China”.