Key Takeaways:

• President Trump signed a memorandum to restrict Chinese investments in strategic areas.
• The directive is intended to safeguard U.S. national security from foreign adversaries.
• Concerns about foreign ownership of U.S. agricultural land are emphasized in the order.
• New rules will target sensitive technologies, including AI and semiconductors.
• The move is expected to escalate economic tensions between the U.S. and China.

On February 21, President Donald Trump signed a significant memorandum directing the Committee on Foreign Investment in the United States (CFIUS) to impose tighter restrictions on Chinese investments identified as strategic threats. This move comes in response to ongoing concerns regarding national security and the potential exploitation of U.S. capital by foreign adversaries.

A White House official noted that the memorandum is designed to protect American interests, specifically accusing China of utilizing U.S. resources to enhance its military and security capabilities, which threatens the United States. Under the directive, new regulations will be implemented to “curb the exploitation of its capital, technology, and knowledge by foreign adversaries such as China,” ensuring that only investments benefiting the U.S. will be permitted.

Moreover, the Trump administration plans to review and possibly expand restrictions on outbound investments towards China, particularly in sensitive fields like semiconductors, artificial intelligence, quantum technology, biotechnology, and aerospace. The economic ramifications of these restrictions may further escalate, especially after previous tariff increases on Chinese imports.

The memorandum also highlighted the alarming trend of foreign entities owning approximately 43 million acres of U.S. agricultural land—almost 2% of the nation’s total land, with China holding over 350,000 acres across 27 states. Lawmakers and agricultural groups have raised concerns that such foreign investments contribute to rising land prices and pose a threat to national security.

In response, the Chinese government has criticized the U.S. for politicizing economic matters, promising to monitor developments closely and safeguard its legitimate rights and interests. Recent incidents of cyberattacks attributed to Chinese hackers targeting U.S. entities, including breaches at the Treasury Department’s CFIUS office, have further exacerbated the situation.

This memorandum echoes an earlier executive order announced under the Biden administration, which began eliminating specific investments in sensitive technologies within China, establishing a precedent for the current actions aimed at reinforcing U.S. security measures against foreign investments.

For more detailed coverage on this development, you can refer to SCMP as well as Channel News Asia.