Biden Curbs China's Investment in US Tech Firms With New Executive Order

President Biden on Thursday signed an executive order to prevent China from buying access to sensitive US technologies through company investments or acqusitions. 

Biden cites the threat of foriegn persons, “particularly those from competitor or adversarial nations,” in gaining access to technologies that risk undermining US national security. 

The executive order doesn’t mention China by name. Nor is it country-specific, according to White House officials. Nevertheless, the order is designed to cover foreign investment in several fields, including “microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, [and] advanced clean energy,” which are key sectors in which the Chinese government has been investing.

Biden’s executive order taps the Committee on Foreign Investment in the United States (CFIUS), which was established in 1975. The committee already has the power to investigate and potentially block foreign companies from buying US firms, like it’s done with Huawei and TikTok’s parent ByteDance. 

Now the White House is directing CFIUS to consider even more factors when it scrutinizes foreign investments in US companies. This includes whether a deal might one day disrupt the US supply chain, if it’ll undermine the country’s technology leadership, or risk exposing people’s personal data to foreign actors. 

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That said, the order isn’t a ban on foreign investment in US technology. Rather, it’ll be up to the CFIUS to determine if a transaction results in “future advancements and applications in technology that could undermine national security, and whether a foreign person involved in the transaction has ties to third parties that may pose a threat to US national security.”

The executive order also doesn't cover outbound US investments in foreign technology sectors. However, White House officials told journalists that the Biden administration and Congress are looking at imposing restrictions on specific kinds of US investment in foreign competitor countries.