Skip to content

US Order Banning Sensitive Investments in China: Impact on EU

German state-run media Deutsche Welle reported that the U.S. government has passed an executive order to restrict US corporate investment in China in key areas such as semiconductors and AI. This has implications for European businesses — the order reportedly applies not only to U.S.-based firms but also to European firms managed by US citizens.

Berlin regarded the new U.S. order with caution, noting that the E.U. is examining security risks associated with investment in third-party countries.  A spokesman for the German Ministry of Economic Affairs stated that, while Germany has mechanisms to screen Chinese investments, controlling outbound investments in China is a complex task.

Meanwhile, the E.U. announced that it will use a new tool to prevent circumvention of export bans related to sensitive technology, working with E.U. member states to identify affected tech areas like quantum computing and AI.

Some have criticized the U.S. order as lacking economic justification, saying that the US is using national security arguments to justify protectionism against China.

Source: Deutsche Welle, August 15, 2023