By using this site, you agree to the Privacy Policy and Terms of Use.
Accept

Your #1 guide to start a business and grow it the right way…

InSmartBudget

  • Home
  • Startups
  • Start A Business
    • Business Plans
    • Branding
    • Business Ideas
    • Business Models
    • Fundraising
  • Growing a Business
  • Funding
  • More
    • Tax Preparation
    • Leadership
    • Marketing
Subscribe
Aa
InSmartBudgetInSmartBudget
  • Startups
  • Start A Business
  • Growing a Business
  • Funding
  • Leadership
  • Marketing
  • Tax Preparation
Search
  • Home
  • Startups
  • Start A Business
    • Business Plans
    • Branding
    • Business Ideas
    • Business Models
    • Fundraising
  • Growing a Business
  • Funding
  • More
    • Tax Preparation
    • Leadership
    • Marketing
Made by ThemeRuby using the Foxiz theme Powered by WordPress
InSmartBudget > Leadership > Biden Takes Another Swipe At Beijing

Biden Takes Another Swipe At Beijing

News Room By News Room August 18, 2023 5 Min Read
Share

Biden has at last issued the long-awaited executive order. It bans American investments in certain aspects of Chinese technology. The White House has indicated that it has been more than a year in the making and reflects all sorts of compromises with others in government and in industry. It parallels last year’s order to stop American exports of certain types of technology to China. Washington’s effort will surely slow the pace of China’s technological advance, but it cannot stop it. And since it is the latest in the tit-for-tat exchange between Beijing and Washington, it certainly will evoke retaliation from Beijing.

Congress, it seems, would have preferred something more severe than the White House has issued. Representative Mike Gallagher (R. Wis) and the House committee dedicated to China wanted a much broader range of banned investments. The investment industry understandably, wanted fewer constraints. If the order is too strong for some and too weak for others, it is nonetheless the first time that Washington has sought to impose investment bans on U.S. firms overseas.

Information available at this early date indicates that the order will prohibit investments in Chinese firms engaged in quantum computing and microelectronics, including sensors and networks, as well as advanced semiconductors and artificial intelligence (AI). Its aim is to limit support for China’s military modernization and claims U.S. national security as its justification. The bans will apply only to new investments, not existing deals and will require outbound investors to provide notification to the Treasury Department. The order aims at U.S private equity firms, venture capital operations, and joint ventures in China. Those who violate the order will face fines and be forced to divest themselves of their stake in the forbidden activities.

Washington has insisted that the limitations are narrowly focused. Treasury Secretary Janet Yellen, on her visit to China last month, described the then pending order as “highly targeted.” But as always with such things, the prohibitions will affect more business and investing than a strict reading of the order would seem to suggest. Business is well aware that even the most tightly written law leaves room for interpretation by the authorities, especially when issues of national security are involved. Even those framing the law claim to have had trouble defining what constitutes AI. Investors will as a consequence steer clear of any activity that even comes close to the forbidden list.

Indicative is how already at least one U.S. venture capital firm, Sequoia Capital, has split off its China business. Meanwhile, direct U.S. investment into China fell last year to a 20-year low of $8.2 billion. Venture capital investments fell to a 10-year low of only $1.3 billion. To be sure, American investors are reconsidering China for a number of reasons having little to do with the new White House order. (Regular readers of this column should be familiar with those considerations.) But this presidential action, combined with fears of an expansive interpretation by Washington, will only reinforce these other reasons and accelerate the flight from China.

At least initially the investment prohibitions will go hard on China, which depends to a large extent on the technical knowledge brought by foreign investment flows. The damage will be that much worse if America’s allies in Europe, Japan, and South Korea yield to pressure from Washington and institute similar prohibitions. Japan and Germany have already shown signs of imposing similar rules. Even if other nations fall into line with the United States, however, the most these restrictions can do is slow China’s acquisition of technologies. History shows that efforts to restrict the movements of technologies are invariably short-lived. In the meantime, all – the United States, the nations of Europe, Japan, and South Korea — await Beijing’s inevitable retaliation.

Read the full article here

News Room August 18, 2023 August 18, 2023
Share This Article
Facebook Twitter Copy Link Print
Previous Article How to Master the Art of Self-Promotion
Next Article Three Ways Marketers Can Balance Personalization And Data Privacy
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Wake up with our popular morning roundup of the day's top startup and business stories

Stay Updated

Get the latest headlines, discounts for the military community, and guides to maximizing your benefits
Subscribe

Top Picks

Trump’s Defiance of TikTok Ban Prompted Immunity Promises to 10 Tech Companies
July 10, 2025
Don’t Let the Wrong Vendor Derail Your Business — Here’s What to Check First
July 10, 2025
Brandi Chastain on the evolution of the business of women’s soccer
July 10, 2025
The One Trait That Separates Great Leaders From Everyone Else
July 9, 2025
Why Great Leaders Don’t Lose Themselves in Team Drama
July 9, 2025

You Might Also Like

Why Great Leaders Don’t Lose Themselves in Team Drama

Leadership

‘Timmy Failure,’ ‘Pearls Before Swine’ Creator Stephan Pastis on Creativity

Leadership

Why Entrepreneurs Are Swapping Beach Vacations for Longevity Retreats

Leadership

Why I Think More Startups Should Try Rotating Leadership

Leadership

© 2023 InSmartBudget. All Rights Reserved.

Helpful Links

  • Privacy Policy
  • Terms of use
  • Press Release
  • Advertise
  • Contact

Resources

  • Start A Business
  • Funding
  • Growing a Business
  • Leadership
  • Marketing

Popuplar

What Could a Healthy AI Companion Look Like?
This City Is the Best Place to Be an Entrepreneur Right Now
Salomon’s push beyond winter sports

We provide daily business and startup news, benefits information, and how to grow your small business, follow us now to get the news that matters to you.

Welcome Back!

Sign in to your account

Lost your password?