US set to ban China from buying companies developing ‘industrially significant technology’
Image credit: reuters
Chinese investors will be blocked from buying US companies developing “industrially significant technology” under new curbs from the US Treasury Department as the trade conflict between the US and China intensifies.
The department is currently considering that any company which is 25 per cent or more owned by Chinese investors will be blocked from purchases.
An official involved in the discussions was quoted in the Wall Street Journal, saying that this threshold could change before the policy is revealed.
The move marks a continuation of Trump’s protectionist policies, particularly against China but also other major markets such as Europe.
Tariffs on $34bn worth of Chinese goods - the first of a potential total of $450bn - are due to take effect on 6 July 2018, following US complaints that China is misappropriating US technology through joint venture rules and other policies.
Even under the previous Obama administration, the US government was wary of Chinese-made technology being used in its infrastructure projects over espionage concerns.
In April 2018, the Commerce Department blocked Chinese tech firm ZTE from importing American components for seven years after it was accused of misleading American regulators following its settlement of charges of violating sanctions against North Korea and Iran.
After this decision was made, Trump announced he wanted to help ZTE “get back into business, fast” after “too many jobs” were lost and he subsequently announced an agreement to reverse the decision.
However, earlier this month the US Senate began working with both Democrats and Republicans who disagreed with the deal to overturn Trump’s agreement.
The Treasury investment restrictions are expected to target key sectors, including several that China is trying to develop as part of its “Made in China 2025” industrial plan, the US official said.
Among its objectives, the plan aims to upgrade China’s capabilities in advanced information technology, aerospace, marine engineering, pharmaceuticals, advanced energy vehicles, robotics and other high-technology industries.
The Wall Street Journal also said the US Commerce Department and National Security Council were proposing “enhanced” export controls to keep such technologies from being shipped to China.