US Outbound Investment Screening Programme Targeting Investments in Chinese Tech Companies

Key points

• The United States has issued new proposed rules governing US investments in technological firms in the People’s Republic of China specifically focused on artificial intelligence, quantum computing and semiconductors.
• The measures are fairly limited in scope and are unlikely to have a major effect on the Chinese technological landscape, especially considering the withdrawal of US investors from Chinese technology firms due to geopolitical tension in recent years.
• The final rules have not yet been published, but the proposed rules provide insight into Washington’s strategy and approach.
• While the rules are more significant and restricting than the limited regulations some had originally recommended, they also feature measures that seem to be designed to further investigate the technological entrepreneurial landscape in China that could in turn set the stage for further expansions of outbound investment screening.
• The measure comes amid an expanding technological export restriction regime being imposed by the United States and many of its allies on China that seeks to maintain a technological edge for both economic and military purposes.