Letters | How Hong Kong can respond to the US’ latest move against Chinese tech

Readers discuss a US executive order aimed at China, Hong Kong weather trends, the potential of the Greater Bay Area, and Taiwan

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US President Joe Biden attends an event to support legislation that would strengthen supply chains for computer chips in the South Court Auditorium at the White House on March 9, 2022. Biden has signed a new executive order that will ban some US investment into China’s quantum computing, advanced chips and artificial intelligence sectors. Photo: AP

Published: 11:30am, 15 Aug 2023

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United States President Joe Biden signed an executive order on August 9, aimed at restricting the flow of US investment into three technology sectors in China: semiconductors, quantum information technologies and certain artificial intelligence systems. The order applies not only to the mainland, but also to Hong Kong and Macau, and it proposes requiring US persons to notify the US government of prospective investment in these sectors.

Although the move by the Biden administration is ostensibly based on national security considerations, it may also be politically motivated.

Still, the actual impact of this order on China could be limited. China is already making significant breakthroughs in the field of quantum computing. In the field of semiconductors, given the US restrictions imposed in recent years, the new order is not expected to cause additional damage. In the field of artificial intelligence, China’s main challenge is not so much fundraising as developing computing power.

In addition, Biden’s order only applies to future investment, and does not affect existing investment. Nor does it target industries the Chinese government considers to be key, such as new materials, new energy and high-end medical equipment. Furthermore, several kinds of transactions may be exempt, including public stock trading and transfers within the company from a US parent to a Chinese subsidiary.

The order is expected to be implemented next year, after public comment. Given that the impact of the order on US allies is unclear, and that China may retaliate, the shape of the final ban is far from certain.