US Proposes Restrictions on Investment in Chinese Tech, AI Trade war news.

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The draft law would prohibit US investors from funding AI systems in China that could be used for weapons targeting, other military applications.

The United States Treasury Department has drawn up a proposed rule that would limit and monitor US investment in China for artificial intelligence, computer chips and quantum computing.

The draft law, released Friday, stems from President Joe Biden's August executive order requiring “countries of concern” about access to US dollars to finance advanced technologies that those countries' militaries use. , can enhance intelligence, surveillance and cyber. Capabilities The decree identifies China, Hong Kong and Macau as countries of concern.

The Biden administration has sought to block the development of technologies by China, the world's second-largest economy, that could give it a military advantage or enable it to dominate emerging sectors such as electric vehicles (EVs).

In addition to the proposed rule, Biden, a Democrat, has also imposed steep tariffs on Chinese EVs, which has political ramifications as both Biden and his Republican presidential rival, Donald Trump, try to show voters that which can best compete with China, a geopolitical rival and major trading partner.

The proposed rule outlines the required information that U.S. citizens and permanent residents must provide when engaging in transactions in the territory, as well as what would be considered a violation of sanctions.

It would specifically prohibit U.S. investors from financing AI systems in China that could be used for weapon targeting, combat and location tracking, among other military applications, a senior Treasury official said. According to the official who reviewed the rule for reporters on condition of anonymity.

The US Treasury is seeking comment on the proposal until August 4 and is expected to issue a final rule after that.

Officials in the Biden administration, including Treasury Secretary Janet Yellen, have insisted they have no interest in “decoupling” from China — although tensions between the two countries have risen in recent years.

After the U.S. military shot down a suspected Chinese spy balloon off the U.S. East Coast in February 2023 and crossed over sensitive military sites in North America, China threatened consequences.

Since then, there have been regular incidents between the two countries based on national security concerns.

For example, Biden in May issued an order barring a Chinese-backed cryptocurrency mining firm from owning land near the Wyoming nuclear missile base, calling its proximity to the base a “national security threat.”

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