The long-awaited order authorizes the US Treasury secretary to prohibit or restrict certain US investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems.
The move could fuel tensions between the world's two largest economies, although U.S. officials insisted the prohibitions were intended to address "the most acute" national security risks and not to separate the two countries' highly interdependent economies. Most investments captured by the order will require the government be notified about them. Some transactions will be prohibited. The Treasury said it anticipates exempting "certain transactions, including potentially those in publicly-traded instruments and intracompany transfers from U.S. parents to subsidiaries."
Democratic Senator Bob Casey said Biden's order "acknowledges the urgency of the issue and will allow the U.S. to reduce some of the risks we face from bad actors like China." It is expected to be implemented next year, a person briefed on the order said, after multiple rounds of public comment, including an initial 45-day comment period.
Emily Benson of the Center for Strategic and International Studies , a bipartisan policy research organization, said she expects investments in artificial intelligence to be prohibited to military users and uses, and that other investments in the sector will only require notification to the government.