The United States continues to tighten the rules surrounding technology and investments in China, amid the ongoing trade war between the two nations.

President Joe Biden on Wednesday signed an “executive order addressing United States investments in certain national security technologies and products in countries of concern.”

The executive order comes after US lawmakers last week began investigating a suspected Chinese hack of the emails belonging to the US Commerce Department, as well as the US State Department, by China-based threat actor labelled Storm-0558.

Executive order

The incident began in July when both Microsoft and the White House confirmed that China-based hackers had compromised the email accounts belonging to a number of US government departments, as well as 25 unnamed organisations.

Indeed, so serious was the attack that US Secretary of State Antony Blinken raised the attack with China’s top diplomat Wang Yi in a meeting in July, after emails belonging to some very senior officials in the US government had been compromised by the China-based cyberattack.

US Commerce Secretary Raimondo’s email was among those apparently accessed by the hackers.

It is worth remembering that the US Commerce Department of Secretary Gina Raimondo has already implemented a series of export control policies against China, curbing the transfer of semiconductors and other sensitive technologies to Beijing.

Now the Biden Administration said in its new executive order that it is committed to keeping America safe and defending America’s national security by protecting technologies that are critical to the next generation of military innovation.

Sensitive tech

The sensitive tech that is critical to US national security covers three sectors: semiconductors and microelectronics, quantum information technologies, and artificial intelligence.

The executive order will also require government notification in other tech sectors.

In an annex to the executive order, the President identified the People’s Republic of China (PRC), including the Special Administrative Region of Hong Kong and the Special Administrative Region of Macau, as a country of concern.

The executive order is designed to prevent American capital and expertise from helping China develop technologies that could support its military modernisation and undermine US national security.

The measure targets private equity, venture capital, joint ventures and greenfield investments.

President Biden said in a letter to Congress he was declaring a national emergency to deal with the threat of advancement by countries like China “in sensitive technologies and products critical to the military, intelligence, surveillance or cyber-enabled capabilities.”

Beijing response

China was quoted by Reuters as saying on Thursday it is “gravely concerned” about the order and that it reserves the right to take measures.

The order affects normal operation and decision-making of enterprises, and undermines the international economic and trade order, a statement from the Chinese Commerce Ministry reportedly stated.

The ministry also said it hopes the US will respect laws of the market economy and the principle of fair competition, and refrain from “artificially hindering global economic and trade exchanges and cooperation, or set up obstacles for the recovery of the world economy.”

The Chinese foreign ministry said the country was “strongly dissatisfied” with and “resolutely opposes the US’s insistence on introducing investment restrictions on China,” having also lodged solemn representations with the US.

The White House said President Biden had consulted with US allies on the plan and incorporated feedback from Group of Seven (G7) nations.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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