US President Joe Biden is planning to sign an executive order to limit critical US technology investments in China by the middle of next month, according to people familiar with the internal deliberations.
The order focuses on semiconductors, artificial intelligence and quantum computing. It would not affect any existing investments and would only prohibit certain transactions. Other deals would have to be disclosed to the government.
The timing for the order, slated for the second week of next month, has slipped many times before, and there is no guarantee it would not be delayed again, but internal discussions have already shifted from the substance of the measures to rolling out the order and accompanying rule, said the sources, who spoke on condition of anonymity.
Photo: AFP
The restrictions would not take effect until next year, and their scope would be laid out in a rulemaking process, involving a comment period so stakeholders can weigh in on the final version.
A spokeswoman for the National Security Council declined to comment.
The investment controls are part of a broader White House effort to limit China’s capabilities to develop the next-generation technologies expected to dominate national and economic security. The effort has complicated the Biden administration’s already fraught relations with China, which sees the restrictions as an effort to contain and isolate the country.
China’s envoy in Washington said earlier this month that Beijing would retaliate if the US imposes new limits on technology or capital flows but did not detail what actions the country could take.
US Secretary of the Treasury Janet Yellen has sought to calm Chinese anger over the curbs, saying they would not significantly damage the ability to attract US investment and were narrowly tailored.
“These would not be broad controls that would affect US investment broadly in China, or in my opinion, have a fundamental impact on affecting the investment climate for China,” Yellen said in an interview with Bloomberg Television earlier this month.
Yellen emphasized the restrictions as well as existing export controls were not in retaliation for any specific actions from China or intended to curtail its growth.
US National Security Adviser Jake Sullivan first publicly discussed the concept in July 2021. China hawks in the US are eager for tougher and faster action. Lawmakers from both parties have also shown interest in legislating on the matter, although a bill has not yet made it to Biden’s desk.
The Senate last week passed an amendment to the national defense policy bill that would require firms to notify the government about certain investments in China and other countries of concern, although they would not be subject to review or possible prohibition.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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