China Threatens Response to U.S. Investment Curbs
Beijing's commerce ministry said it "firmly" opposes a Treasury proposal that would add biotechnology to the technologies in which Americans may not invest in China and widen limits on supercomputing and hypersonic weapons, and reserved the right to unspecified countermeasures.
China's commerce ministry urged the United States to stop expanding its limits on American investment in China, saying a new Treasury proposal "discriminatorily" widens the restrictions. The ministry said it firmly opposes the plan and reserves the right to take countermeasures, which it did not describe, and said the move runs against the consensus reached by the two presidents, who have met twice in six months.
The Treasury Department proposed the rule on October 22 to carry out the Comprehensive Outbound Investment Security Act, which Congress passed in the 2026 defense bill. It would require Americans to notify Treasury of some deals with companies from countries of concern and ban others. The covered fields are chips and microelectronics, artificial intelligence, quantum technology, supercomputing and hypersonic weapons, and Treasury Secretary Scott Bessent has added biotechnology.
Nothing changes yet. The proposal is open for public comment, and final rules will set the date it takes effect. The current program, which already limits some U.S. investment in Chinese semiconductors, quantum and AI, stays in place. Treasury says the rule is not aimed only at China.
Beijing — China has told the United States to drop a proposed expansion of its limits on American investment in Chinese technology and warned that it may respond.
What Beijing said
In a statement, China's Ministry of Commerce said the U.S. proposal "discriminatorily" widened China-related investment restrictions and intensified curbs, according to Reuters. The ministry said it firmly opposed the proposal and reserved the right to take countermeasures, without saying what they would be. It said the plan would damage economic ties and ran against the consensus reached by the two countries' presidents.
What Treasury proposed
On October 22 the Treasury Department issued a proposed rule to update its Outbound Investment Security Program under the Comprehensive Outbound Investment Security Act, known as the COINS Act, which Congress passed as part of the fiscal 2026 National Defense Authorization Act. The rule would require U.S. persons to notify Treasury of certain transactions with covered foreign companies in "notifiable" technologies and would prohibit certain others in "prohibited" technologies.
The law names five sectors: semiconductors and microelectronics, artificial intelligence, quantum information technology, high-performance computing and supercomputing, and hypersonic systems. It also lets the Treasury secretary add technologies that help a country of concern's military, intelligence, surveillance or cyber capabilities, and Bessent has added biotechnology. "The proposed regulations 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," Bessent said.
What stays the same for now
The proposal is open for public comment and does not yet take effect; Treasury says final regulations will come later and set an effective date. The existing program, which already restricts some U.S. investments involving China in semiconductors, quantum technology and AI, remains in force. Treasury says the measures do not cover China alone.