China is "deeply dissatisfied" and "firmly" opposes the new restrictions announced by US President Joe Biden to limit his country's investments in strategic technological areas in the Asian country. The Chinese Foreign Ministry issued a statement on Thursday calling Washington's measures "examples of economic coercion and technological bullying." And it warns that the Asian giant will "firmly protect its rights and interests." The Ministry of Commerce has also joined the criticism against this "politicized action" that seeks to "decouple and cut off supply chains under the pretext of national security."
"The United States is going against the defense of the market economy and the principle of fair competition, is hindering the usual business practices of companies, destroying orders for international trade and seriously disrupting the security of global supply chains," said a spokesman for the Ministry of Commerce, who said that "China reserves the right to take action in relation to the situation."
Amid a growing rivalry between the two major economic, technological and military powers of the twenty-first century, the White House has in recent months imposed a series of restrictions on China's access to critical technology and tools for semiconductor manufacturing, and has halted subsidies from U.S. high-tech firms that produce advanced chips on Chinese soil.
But Biden's executive order Wednesday goes a step further, banning U.S. venture capital companies from investing in three key sectors for the Chinese economy: semiconductors, quantum computing and artificial intelligence. It is one of the most important actions Washington has taken to restrict U.S. investments in China, and comes after months of talks with G-7 members, whom the United States has urged to take similar steps.
Although the United States stresses that the measure will affect only these specific sectors "due to the role they could play in the development of China's military, intelligence, surveillance and cyber capabilities", in Beijing's eyes, Washington has not kept its word that it "does not seek decoupling", [the reduction of exchange, mainly trade, between the two nations] and as US Secretary of State Antony Blinken and Treasury Secretary Janet Yellen insisted in their recent visits to the Chinese capital.
Self-sufficiency
According to Beijing, Washington's "real purpose is to deprive China of its right to develop and thus maintain its own hegemony." "It is pure economic coercion and technological harassment," Foreign Affairs criticized in its statement on Thursday, in which it urges that the measures be withdrawn "immediately." Technological self-sufficiency is one of the most pressing challenges facing the country. In recent months, the Communist Party has tightened its grip on the tech sector and limited the West's access to certain materials and technologies for key industries.
Alfredo Montufar-Helu, director of the China Center for Economics and Business, told Hong Kong's South China Morning Post that the new U.S. restrictions could "extend to areas that are theoretically not sensitive, such as autonomous driving, synthetic biology and climatology." "Limiting certain technologies now could harm the innovation potential of some commercial products over the next decade," he added.
In 2022, the value of US foreign direct investment in China was 8,000 million dollars (7,200 million euros), the lowest since 2005, according to the Rhodium Group, while that of US venture capital investments in the Asian country was 1,000 million dollars (906 million euros). compared to a maximum of 19,000 million dollars (17,200 million euros) registered in 2018.
Biden's decision could derail the possible trip to China of US Commerce Secretary Gina Raimondo, who had expressed interest in visiting the Asian country in "late summer". During this summer season there has been a diplomatic landing from Washington with the mission of finding areas for cooperation and redirecting the bilateral relationship, which is, according to Beijing, "in a critical state".
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