Taking a major step against China, the US has issued an executive order. Under this order, US investment in China's sensitive technology such as computer chips has been banned. Under this much-awaited decision, the US Treasury Secretary has been empowered to ban or limit US investment in three sectors of China. These three sectors are semiconductor and microelectronics, quantum information technology, and special types of artificial intelligence.
Know what will be the effect of the order
The order blocks US investment and expertise in helping to develop technology being developed by China so that China cannot use this sensitive technology to modernize its military. Under this order, US private equity, venture capital, joint venture, and greenfield investments will not be able to invest in companies related to China's sensitive technology. US President Joe Biden told Congress in a letter that countries like China are declaring a national emergency to stop the development of sensitive technology and its products. These technologies are linked to vital military, intelligence surveillance, and cyber capabilities.
Semiconductor key
Many Chinese companies these days are working towards designing such software, with the help of which computer chips and other tools can be made. This order of the US government will restrict US investment in these companies. Let us inform you that at present countries like America, Japan, and the Netherlands are the major manufacturers of semiconductors or computer chips, but because of the strategic importance of semiconductors, China is also working on developing this technology domestically.
America's strategic move against China
Senior US Democratic lawmaker Chuck Schumer said that for a long time, the Chinese military is getting stronger with American money. Today, the United States has taken the first strategic step to stop the investment of American money in the modernization of the Chinese military. It is worth mentioning that this order will only stop investment in China's sensitive technology in the future, but it will not affect those who are already invested. However, detailed information on this investment can be sought by the US government.
Relations between the two countries may deteriorate
It is believed that this new order of America may worsen its relations with China. The Chinese Embassy in America has also expressed disappointment regarding this order. Although on China's objection, America has said that this order has been issued only keeping in mind its national security, this will not affect the economic dependence of the two countries on each other. On the other hand, the American opposition party, the Republican Party, has issued a statement pointing out many flaws in this order and has also expressed displeasure over implementing this order only on future investments.
US investment in China declined drastically
Even though the US government has issued this order now, at one time American investment used to be mostly in Chinese companies, but now there has been a huge decline in it. According to media reports, in the year 2021, US venture capital investment in Chinese companies was around $ 32 billion, which has now come down to around $ 9 billion. So far this year, only $1.2 billion has gone into American venture capital in Chinese tech companies.
(pc amarujala)
