Concerns about national security are the main reason why U.S. politicians are pushing to limit investments in China. The U.S. Treasury’s Final Rule, which went into effect on January 2, 2025, is a noteworthy development. This rule particularly targets foreign investments in China’s sophisticated technological industries, including as artificial intelligence (AI), semiconductors, and quantum computing. The law, which reflects bipartisan agreement on the need to protect national security, attempts to stop U.S. investments from bolstering the technological breakthroughs of the Chinese military.
Congress is currently debating more comprehensive legislative measures, like the Comprehensive Outbound Investment National Security Act of 2024 (COINS Act), in addition to the Treasury’s rules. The goal of this proposed law is to increase the limitations on American investments in China to include 15 crucial technologies that are considered sensitive.
Rising U.S.-China tensions highlight the necessity of these measures, as senators stress the need for preemptive actions to reduce possible threats presented by Chinese technical progress. Additional requirements that would require assessments of Chinese-made consumer technology for national security threats and closely examine real estate purchases close to key facilities are being considered as part of this continuous endeavor.
A rising understanding of the strategic ramifications of foreign investment in cutting-edge technologies is reflected in these developments, which represent a dramatic change in U.S. policy toward China.
