Beijing pushed back sharply on Saturday against a new U.S. Treasury Department proposal that would broaden restrictions on American investment in Chinese technology sectors, warning that the move could strain bilateral economic relations and promising unspecified countermeasures.
The proposed rule, unveiled Thursday, would expand the existing Outbound Investment Security Program (OISP) to cover additional areas including hypersonic systems, quantum information technologies, high-performance computing, supercomputing, and artificial intelligence. The Treasury also added biotechnology to the list of targeted sectors, a step Secretary Scott Bessent had advocated.
In a statement carried by the state-run Global Times, China's commerce ministry rejected the proposal as "discriminatory" and accused Washington of overextending the concept of national security. "This is a typical case of overstretching the concept of national security," a ministry spokesperson said. "China will closely monitor subsequent developments and reserves the right to take corresponding measures."
The ministry further warned that the rule would harm economic ties between the world's two largest economies and reiterated that Beijing retains the right to respond with countermeasures, though it did not specify what those might entail.
Treasury Secretary Bessent defended the proposal in a Thursday press release, saying it would "strengthen the existing Outbound Investment Security Program to prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security." The rule is aimed at keeping American capital from fueling technological advances in China, Russia, and North Korea—countries the U.S. designates as foreign adversaries.
The proposed regulations will undergo a public comment period before Treasury finalizes the rule, a process that could take months and may be subject to further revisions.
The investment restrictions are the latest front in a broader U.S.-China technology competition that has intensified in recent years. Just days earlier, the State Department announced sanctions against five Chinese companies linked to Linwei Ding, a former Google engineer convicted earlier this year of stealing AI-related trade secrets. Beijing condemned those sanctions, saying they "severely harms the legitimate rights and interests" of Chinese businesses.
The Pentagon has also been pressing universities to sever research ties with Chinese entities, as reported by The World Signal, while lawmakers have urged the Defense Department to cut China-backed students from defense research projects, according to separate coverage.
China's response signals that it views the investment curbs as part of a coordinated U.S. effort to contain its technological rise. The commerce ministry's statement, published in a state-run outlet, is likely intended to rally domestic support and signal resolve to U.S. policymakers.
Whether Beijing follows through with concrete retaliation remains uncertain, but the language mirrors past warnings that preceded tit-for-tat measures. For now, the proposal enters a public comment phase, giving both sides room to maneuver before any final rule takes effect.
