China Urges US to Drop Plan to Widen Curbs on American Investment in Chinese Tech
China’s Commerce Ministry on Saturday urged the United States to halt a Treasury Department proposal that would widen limits on American investment in Chinese technology companies and, for the first time, cover biotechnology, Reuters reported.
In a statement carried by the state news agency Xinhua, a ministry spokesperson called the proposal discriminatory and a typical case of stretching the concept of national security too far.
The spokesperson said the plan runs counter to an important consensus reached by the two countries’ leaders, expressed serious concern and firm opposition, and said Beijing reserves the right to respond with measures of its own.
The ministry also argued that limiting investment in China would hurt American companies’ own interests and urged Washington to stop politicizing and weaponizing trade issues.
China’s Foreign Ministry had pushed back a day earlier.
“Overstretching the concept of national security, taking discriminatory measures against specific countries, and artificially restricting trade, economic and investment activities serve no one’s interests,” spokesperson Mao Ning said, the Associated Press reported.
What the Rule Would Do
Treasury issued the proposal Thursday to carry out the Comprehensive Outbound Investment National Security Act, which Congress passed in December 2025 as part of the annual defense policy bill.
The rule would require Americans to notify Treasury about certain deals with companies in countries of concern that work on sensitive technologies, and would ban other deals outright.
The law covers semiconductors, artificial intelligence, quantum computing, high-performance computing and hypersonic systems. Treasury used authority in the law to add biotechnology to the list.
“The proposed regulations would strengthen the existing Outbound Investment Security Program to prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security,” Treasury Secretary Scott Bessent said.
The biotech provisions would reach brain-computer interfaces, biomanufacturing equipment and gene sequencing technology, among other areas, according to the proposal published in the Federal Register.
Besides China, including Hong Kong and Macau, the countries of concern are Cuba, Iran, North Korea, Russia and Venezuela under Nicolas Maduro.
Deals totaling $50,000 or less with a covered company over 12 months would be exempt from the notification requirement, but not from the outright bans. Public comments are due Dec. 7.
The biotech piece could complicate financial ties at a time when U.S. drugmakers increasingly license experimental medicines from Chinese companies, Bloomberg reported. The restrictions would not take effect until a final rule is issued.
The proposal “sends an important signal to markets that Washington is tracking where U.S. capital is flowing and what capabilities it is helping build,” Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, told the AP.
Ryan Majerus, a former U.S. trade official now at the law firm King & Spalding, called it “just the first step in a fairly long process” toward a program with more enforcement teeth.
The outbound investment program began in 2023 under an executive order from then-President Joe Biden. In July, Treasury fined a U.S.-based company $200,000 for failing to report a $92,500 investment in a Chinese AI and robotics firm.
The dispute comes as the world’s two largest economies try to hold together a trade truce that President Donald Trump and Chinese President Xi Jinping extended last month into January.
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