China urges US Treasury to stop proposed restrictions on tech investments

Chinese officials called on the U.S. Saturday to reconsider its proposed rule seeking to further restrict American investments into its tech industry, saying the move would disrupt trade relations between the two countries.

On Thursday, the Treasury Department proposed a rule expanding existing restrictions in the Outbound Investment Security Program (OISP) on hypersonic systems, quantum information technologies, high-performance computing, supercomputing and AI. The proposed mandate seeks to prevent a handful of foreign adversaries — China, Russia and North Korea — from using money from the U.S. to bolster its own technological advancement.

Beijing’s commerce ministry firmly opposed the proposal in a statement published in the Chinese Global Times, a state run media outlet, in which a spokesperson said the rule “discriminatorily” widened China-related investment restrictions.

“This is a typical case of overstretching the concept of national security. China will closely monitor subsequent developments and reserves the right to take corresponding measures,” the spokesperson said.

The ministry also said the proposal would damage ⁠economic ties between the two countries, and it reserved the right to take unspecified ​countermeasures.

The new rule also adds the biotechnology industry to the list of sectors it plans to target under OISP, an addition Treasury Secretary Scott Bessent called for, according to a Thursday press release from the department.

“The proposed regulations would strengthen the existing Outbound Investment Security Program to prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security,” Bessent said.

The proposal will go through a public comment period before the Treasury issues a final rule.

Earlier this week, the State Department announced sanctions against five Chinese companies connected to a former Google engineer, Linwei Ding, who was convicted earlier this year of stealing AI-related trade secrets. China opposed the sanctions, saying the punishment “severely harms the legitimate rights and interests” of Chinese businesses.

Source: Thehill