WASHINGTON — President Biden will sign an executive order on Thursday designed to sharpen the federal government’s powers to dam Chinese investment in technology in the USA and limit its access to personal data on residents, administration officials say, in a move that’s certain to heighten tensions with Beijing.
The brand new order is designed to focus the actions of the secretive Committee on Foreign Investments in the USA, created by Congress nearly a half-century ago. For years the committee’s powers were limited largely to blocking the foreign acquisition of American firms that may need a direct impact on national security — a military contractor, for instance.
But the brand new order directs the committee, known by the acronym CFIUS, to focus on specific varieties of transactions that will give a foreign power access to key technologies that Mr. Biden has identified as critical to American economic growth.
The committee will review cases that will have an effect on “microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, advanced clean energy, and climate adaptation technologies,” in accordance with a White House summary. While China isn’t specifically mentioned within the order, all of those are key areas within the “Made in China 2025” drive began seven years ago by President Xi Jinping, and so they are also technologies during which the USA is now placing more federal resources.
Mr. Biden’s order has been anticipated for months, especially after the priorities weren’t included in an industrial policy bill that passed in Congress recently, pouring money into key technologies. However the order doesn’t regulate “outbound investment” by American corporations in foreign nations, though the Biden administration seems more likely to seek recent authorities to control that as well. For years, one fear has been that China requires corporations to show over technology as a part of the value for being allowed to enter the Chinese market.
“For China, this work is about survival,” Nigel Inkster, the previous director of operations and intelligence for Britain’s Secret Intelligence Service, wrote in The Recent York Times opinion section earlier this week, delineating covert operations by Chinese intelligence operatives to realize technology or manufacturing techniques that will speed Beijing’s way. It notes intelligence laws in China that order Chinese residents to assist intelligence agencies, normally secretly.
To a point the presidential order formalizes a recent, broader interpretation of the committee’s authorities that has been underway for several years. White House officials say that they imagine Mr. Biden’s order to focus the CFIUS group on key technologies doesn’t require amending its authorizing laws, which date back to the group’s creation in through the Gerald Ford administration.
But over the past seven or so years, the facility of the interagency group has step by step expanded significantly, and it now has the facility to dam even a minority investment — partly due to fears that Chinese state-owned firms were establishing enterprise capital funds in Silicon Valley and beyond to get an early take a look at recent technologies — without buying a majority stake.
A White House statement said the brand new order wouldn’t take a look at size, however the characteristic of the technology itself, including “advancements and applications in technology that might undermine national security.”