Biden’s calculated power play: curbing China’s tech

By Imran Khalid | Gwadar Pro Aug 13, 2023

Editor's Note: The writer is a freelance columnist on international affairs based in Karachi, Pakistan. The article reflects the author's opinions and not necessarily the views of Gwadar Pro.

Last week, President Joe Biden took a highly provocative step by signing an executive order that aims to limit investments in China. The aim? To put a spanner in the works of China's progress in cutting-edge technologies: semiconductors, quantum tech, and certain AI systems.

This "decoupling" strategy started with Donald Trump and Biden's team is carrying that baton forward. Interestingly, this order doesn't affect the investments the US has already made in China; it's about future investments. The Biden administration further insists that these restrictions are precise and won't drastically disrupt investment conditions in China.

However, the latest executive order is unlikely to inflict any significant setback on Chinese high-tech prowess. This assumption stems from the recognition that China relies on American technology far more than American capital. Certain technology exports to China are already facing restrictions, which are aimed at curbing China's drive to self-develop critical capabilities. This maneuver, however, carries a nuance. The order's declared intent is to halt American capital and technology from bolstering tech that could help China's military modernization and erode US security. Private equity, venture capital, joint ventures, and fresh investments are squarely in its sights.

The new rule means the government needs to be notified about many American investments in China. However, the US Treasury thinks some transactions might not have to follow this rule, like ones involving things that can be bought by the public or when a big company transfers money to its subsidiaries.

The Biden administration maintains that the underpinning of this move lies within the realm of national security imperatives, as opposed to mere economic compulsions. Ostensibly limited in its target scope, the order's professed purpose is to curtail China's potential exploitation of American capital infusion into its tech enterprises, a crucial facet in its military modernization agenda. Concurrently, it aims to safeguard the essential trade interdependencies that fuel the economic engines of both countries. reveals a calculated prance of power by the Biden administration, where security and commerce are interwoven in the larger theater of US-China relations.

While this order has garnered considerable focus, it fits into the broader landscape of US politics. The current inclination to distance from China is nothing but an electoral maneuver aimed at garnering voter endorsement. This is being increasingly viewed as an electoral tactic to win voters’ favor. The executive order's emergence and its evolution mirror a simmering aspiration of the American political to curtail China's high-tech ascent. As the gears of the US general and presidential elections grind into motion, all the contenders from both sides of the divide seem more fixated on mutual mudslinging and berating China than focusing on their national governance plans.

The already toxic anti-China sentiment in American politics has made bashing Beijing an convenient ploy for politicians vying for the spotlight. Even Biden succumbs to this trend, underscoring how harsh rhetoric against China has become a low-cost attention-grabbing tactic in the political playbook. Biden's jarring comments need contextualization, akin to the charged China critiques from GOP contenders like Donald Trump, Ron DeSantis and Nikki Haley.

Historical precedent hints that as the campaign unfolds, Washington's standards will plummet further, spawning even more sensational allegations. The unchecked China-bashing has fueled a no-holds-barred descent into acrimony, leaving the US increasingly caustic. Interestingly, there is also a tense showdown between proponents of the order and worries within tech and economic circles about possible blowback. But those voices are being muffled by a biased anti-China narrative.

Biden’s order reveals yet another thread in the tapestry of American disquietude, if not an outright manifestation of desperation, as it grapples with China's ascending prowess in the technological and economic arena. With a foresight honed over years, China has diligently cultivated a robust ecosystem for technological innovation to pre-empt such a situation.

China has long anticipated such restrictive measures from Washington. Some Western analysts are forecasting China's rejoinder in the form of impactful yet measured moves, such as stern regulations on American corporate mergers or cautious explorations of extended export controls. They have further predicted that, rather than an immediate tit-for-tat, Beijing may resort to parry in different domains – for example imposing export curbs on strategic resources like rare earths or specific minerals.

But history tells that, in a striking contrast to the United States, China refrains from wielding forceful threats against other countries, weaving military pacts and exporting its ideological tenets. As the presidential race gets ready to begin, we might see both Republicans and Democrats engaging in a competitive race to show themselves as more against China than each other. This scenario bodes poorly as politicians unjustly single out a foreign nation solely for their own domestic political interests. So, we may witness more dramas like this when the election campaigns enter the next round in the US.

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