BIDEN ISSUES NEW ORDER TO BLOCK CHINESE INVESTMENT IN TECHNOLOGY IN THE U.S.

The move, which is bound to heighten tensions with Beijing, is designed to focus on specific types of transactions that would give a foreign power access to key technologies.

WASHINGTON — President Biden will sign an
executive order on Thursday
designed to sharpen the
federal government’s powers
to block Chinese investment
in technology in the United
States and limit its access
to private data on citizens,
administration officials say,
in a move that is bound
to heighten tensions with
Beijing.

The new order is designed
to focus the actions of the
secretive Committee on
Foreign Investments in the
United States, created by
Congress nearly a halfcentury ago.

For years the committee’s powers were
limited largely to blocking
the foreign acquisition of
American firms that might
have a direct impact on
national security — a military
contractor, for example.

But the new order directs
the committee, known by
the acronym CFIUS, to
concentrate on specific
types of transactions that
would 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 would have an
impact on “microelectronics,
artificial intelligence,
biotechnology and
biomanufacturing, quantum
computing, advanced
clean energy, and climate
adaptation technologies,”
according to a White House
summary. While China is
not specifically mentioned
in the order, all of those are
key areas in the “Made in
China 2025” drive started
seven years ago by President
Xi Jinping, and they are also
technologies in which the
United States is now placing
more federal resources.

Mr. Biden’s order has been
anticipated for months,

especially after the priorities
were not included in an
industrial policy bill that passed
in Congress recently, pouring
money into key technologies.
But the order does not regulate
“outbound investment” by
American companies in foreign
nations, though the Biden
administration seems likely
to seek new authorities to
regulate that as well. For years,
one fear has been that China
requires companies to turn over
technology as part of the price
for being allowed to enter the
Chinese market.

“For China, this work is about
survival,” Nigel Inkster, the
former director of operations and
intelligence for Britain’s Secret
Intelligence Service, wrote in The
New York Times opinion section
earlier this week, delineating
covert operations by Chinese
intelligence operatives to gain
technology or manufacturing
techniques that would speed
Beijing’s way. It notes intelligence
laws in China that order Chinese
citizens to help intelligence
agencies, usually secretly.
To some degree the presidential
order formalizes a new, broader
interpretation of the committee’s
authorities that has been
underway for several years.
White House officials say that
they believe Mr. Biden’s order
to focus the CFIUS group on key
technologies does not require
amending its authorizing laws,
which date back to the group’s
creation during the Gerald Ford
administration.

But over the past seven or
so years, the power of the
interagency group has gradually
expanded significantly, and it
now has the power to block even
a minority investment — in part
because of fears that Chinese
state-owned firms were setting
up venture capital funds in
Silicon Valley and beyond to get
an early look at new technologies
— without buying a majority
stake.

A White House statement said
the new order would not look
at size, but the characteristic of
the technology itself, including
“advancements and applications
in technology that could
undermine national security.”