The U.S. Treasury Department has proposed expanding restrictions on American investment in sensitive technologies abroad, adding biotechnology to the sectors targeted by the Outbound Investment Security Program and widening controls involving artificial intelligence and other advanced technologies. China opposed the proposal on Saturday, urging Washington to reconsider and warning of possible countermeasures.
The proposal, announced Thursday, would extend existing restrictions involving hypersonic systems, quantum information technologies, high-performance computing, supercomputing and AI. Its stated purpose is to prevent U.S. investment from supporting technological development that could threaten national security, with China, Russia and North Korea identified as foreign adversaries targeted by the proposed measures.
The changes are not yet final. Treasury will conduct a public comment period before issuing a final rule, leaving the proposal subject to review and possible revision. The announcement therefore marks a proposed expansion of the program rather than the immediate implementation of all the additional restrictions.
Biotechnology is a notable addition to the proposed framework. Treasury Secretary Scott Bessent supported bringing the industry within the program’s scope. In announcing the proposal, he described the broader changes as a way to keep American investment from helping adversaries develop critical technologies that could endanger U.S. national security.
China’s commerce ministry rejected that rationale, arguing that the proposal stretches the concept of national security and unfairly broadens restrictions connected to China. The ministry said the measures would harm economic and trade relations between the two countries. It also reserved the right to respond, without specifying what any countermeasures would involve.
The dispute reflects the different purposes the two governments assign to cross-border technology investment. Washington presents the proposed controls as a security measure aimed at sensitive capabilities. Beijing views the expansion as discriminatory interference with commercial ties. China’s objections do not change the proposal’s procedural status: Treasury must still complete its rulemaking process before adopting a final version.
Outbound investment controls address a different part of the technology supply chain from export restrictions. Export controls generally govern the transfer of goods, software or technology across borders. Investment restrictions focus instead on financial transactions and business relationships that can help companies develop capabilities. Investment can also bring benefits beyond funding, including management expertise, commercial connections and access to wider business networks.
The technologies named in the proposal have both civilian and potential military applications, making their treatment a recurring challenge for national-security regulation. AI and high-performance computing support commercial research and services as well as defense-related work. Biotechnology likewise spans a broad range of activities, making the precise boundaries of any final restrictions important for investors and businesses assessing their obligations.
The public comment process will provide an opportunity to examine those boundaries before the regulations are finalized. The scope of covered technologies, transactions and compliance requirements will determine how the proposed expansion operates in practice.
Sources: Federal Register (AI and super intelligence), The Eastern Herald, The Hill, Big News Network.com