China says US investment policy ‘severely disrupts’ global supply chains

BEIJING: Beijing on Thursday (Aug 10) said a new US policy to restrict investment in Chinese technology “severely disrupts the security of global industrial and supply chains”.

An unnamed Ministry of Commerce spokesperson said President Joe Biden’s executive order “seriously deviates from the market economy and fair competition principles the US has always promoted, and affects companies’ normal operation decisions, damages the international trade order, and severely disrupts the security of global industrial and supply chains”.

“China expresses serious concern about this and reserves the right to take measures,” the spokesperson said in a statement published by the ministry, without mentioning specific countermeasures.

The move could fuel tensions between the world’s two largest economies.

Meanwhile, the Chinese embassy in Washington said it was “very disappointed” by the measure. A spokesman for the Chinese embassy in Washington said the White House had not heeded “China’s repeated expression of deep concerns” about the plan.

The spokesman said more than 70,000 US companies do business in China.

The restrictions will hurt both Chinese and American businesses, interfere with normal cooperation and reduce investor confidence in the US, he said.

Biden’s executive order directs the Treasury Department to restrict certain US investments in China in sensitive high-tech sectors, including semiconductors, quantum computing and artificial intelligence. 

The restrictions, which are expected to take effect next year, come as Biden’s administration looks to bolster its position vis-a-vis China on a multitude of fronts: Military, economic and technological.

China hopes the US will “avoid artificially obstructing global economic and trade exchanges and cooperation, and avoid setting up obstacles for the recovery of the world economy”, the Chinese commerce ministry spokesperson said Thursday.