America’s approach to investments hampering artificial intelligence and chip sectors

Washington’s latest proposal to limit and monitor investments by U.S. companies and individuals in key technologies in China will threaten global artificial intelligence and semiconductor supply chains and increase uncertainty about the international economic recovery, officials and experts said Monday.

The comments came after the U.S. Treasury Department on Friday unveiled a proposed rule that would limit and monitor investments in China by U.S. companies and individuals in artificial intelligence, chips and quantum computing.

The proposed rule outlines the information that U.S. citizens and permanent residents must provide when transacting in this area, as well as what will be considered a violation of the restrictions.

A spokesman for China’s Ministry of Commerce said in a statement on Monday that the U.S. has repeatedly emphasized that it has no intention of “decoupling” from China or impeding China’s economic development. However, they insist on issuing such proposed regulations to restrict US companies’ investment in China and suppress the normal development of Chinese industry.

The Ombudsman said such measures constitute an overreach under the guise of national security, undermine the international economic and trade order, and disrupt the security and stability of global industrial and supply chains.

“China expresses serious concern and firm opposition to this situation and reserves the right to take appropriate measures,” the spokesman added.

Wei Jianguo, former vice minister of commerce, said: “Despite Washington’s rhetoric shifting from decoupling to reducing risks in key supply chains, the U.S. government continues to tighten controls on exports and investments to China.

“This move is the latest evidence that the U.S. government is using all means to stop China’s technological development, regardless of how much pain it causes to American companies,” Wei said.

Zhou Mi, a researcher at the Beijing-based China Academy of International Trade and Economic Cooperation, said the latest U.S. actions represent a strategic expansion of export controls to include investment restrictions, aimed at further decoupling from China in high-tech sectors.

Zhou said these restrictions will disrupt normal trade and investment activities between Chinese and US companies, hamper bilateral technology exchanges and undermine the global innovation ecosystem.

Xiang Ligang, CEO of the Information Consumption Alliance, a telecommunications industry association in China, said the U.S. government’s increased efforts to contain the growth of China’s technology sector through export and investment controls will harm the interests of U.S. companies and accelerate Chinese companies’ technological breakthrough efforts.

Mainland China, the world’s largest semiconductor market, consumes more than half of the world’s semiconductors, which are then made into technology products to be re-exported or sold domestically, according to research firm Daxue Consulting.