China Daily Editorial
Given the absence of the media noise, as well as the messaging remarks that usually accompany a typical executive order by the president of the United States, Wednesday’s order may indeed have had a “low-key” rollout.
That much of what it says had been anticipated is partly attributable to the lack of fanfare. Also, it has been substantially narrowed and toned down, according to reports, which is likely another contributing factor. Still, President Joe Biden’s order restricting US investments in certain Chinese technology sectors is a fresh blow to bilateral ties.
The pretext is again national security. The new executive order is aimed at denying China, as a “country of concern”, access to “sensitive technologies critical to national security”. Semiconductors and microelectronics, quantum information technologies, and artificial intelligence are those identified.
Such a “narrowly targeted” national security action, according to the White House, seeks to “prevent US investments from helping accelerate the indigenization of these technologies”, the White House stated in its news release. As a result, some investments will be subject to strict scrutiny; others will simply be prohibited.
Coupled with the export controls already in place, the newly proposed control on US investments in China will be a major blow to the overall Chinese start-up ecosystem and US efforts to share China’s development dividends. But on top of such a lose-lose scenario for the world’s largest two economies themselves, it poisons the global market with harmful geopolitical factors and has the potential to render the current international economic and trade regime dysfunctional. But with the next US presidential election looming on the horizon, Biden doesn’t want to be perceived as being soft on China.
Although the White House argues it is “de-risking”, the Chinese Foreign Ministry made no bones about Beijing viewing the move as “’decoupling’ under the guise of ‘de-risking’ in the field of investments”.
While the moves against Chinese tech companies such as Huawei are intended to limit the use of their products or services, so as to protect US companies by providing a lifeline in the market. The investment restrictions are more than “protecting technologies that are critical to the next generation of military innovation”.
The White House claims they are a “small yard, high fence” approach intended to hinder China “advancing” the development “of such sensitive technologies”. But while the executive order is couched in terms of national security, it is essentially economic protectionism aimed at directing capital, the lifeblood of research and development, away from China by means of coercion.
This will have a domino effect on other countries, reducing their economic growth. It will also further fuel the tensions between Beijing and Washington and likely lead to escalating frictions beyond the economic sphere.
– Courtesy of China Daily
