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MOFCOM deplores U.S. government plan to curb outbound investment in Chinese technology firms

2024-06-25 08:42:38Global Times Editor : Li Yan ECNS App Download

China's Commerce Ministry (MOFCOM) on Monday hit back at the U.S.' plans to curb new U.S. investment in critical Chinese tech industries, saying China firmly opposes the U.S.' coercive move and reserves the right to take counter measures.

The U.S. has repeatedly stated that it has no intention to pursue a "decoupling" from China nor stop China from growing its economy, but in reality, the U.S. government continues to announce restrictive rules to block outbound investment in China and stymie the normal development of Chinese industries, a spokesperson with the MOFCOM said in a statement seen on its website on Monday.

The ministry said this is typical abuse of national security, violates the consensus reached by the two heads of state in San Francisco, impacts normal economic and trade cooperation between companies from the two countries, harms international economic and trade environment as well as the safety and stability of global supply chains.

"We express deep concerns and firm opposition [to the U.S. move], and reserve the right to take corresponding measures," the spokesperson said.

The Chinese side urged the U.S. to respect market rules and the principle of fair competition, and stop politicizing and weaponizing economic and trade issues. "The U.S. should remove restrictions on investments in China and build a sound environment for China-U.S. economic and trade cooperation," the spokesperson noted.

The comments came after the U.S. Treasury Department published the proposed rules and a raft of exceptions after an initial comment period following an executive order signed by U.S. President Joe Biden last August, Reuters reported earlier.

Treasury Assistant Secretary for Investment Security Paul Rosen was quoted as saying in the Reuters report that the proposed rules aim to "protect U.S. national security." Multiple forms of investment are set to be placed under further scrutiny, including U.S.-managed private equity and venture capital funds, as well as some U.S. limited partners' investments in foreign managed funds and convertible debt.

In October 2023, the Biden administration announced a set of measures to block China, among other countries, from buying high-end AI chips designed by Nvidia and other American companies, the BBC reported.

There are more than 4,400 AI firms currently in China, with the industry reaching 500 billion yuan ($68.87 billion) in size as AI has becomes an important driving force and strategic technology for a new round of technological revolution and industrial transformation, a report shared with the Global Times revealed.

Bian Yongzu, a senior industry research fellow, told the Global Times on Monday that the U.S. move to suppress China has failed to achieve its desired result. Bian said that China's technological advancements in areas such as aerospace, telecommunications and semiconductors have not slowed facing U.S. pressure but instead accelerated.

"U.S. companies face a dilemma on whether to follow the government, as abandoning the market in China will mean losing significant opportunities," Bian said.

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