Being "tightened" by the US, China "launches new trick" to attract foreign investment

China's State Council announced on August 13 that it has issued a circular guiding the optimization of China's foreign investment environment and the attraction of more foreign investment. (Source: Reuters)

In the circular, China's State Council stressed that Chinese authorities need to strengthen protection of foreign investors' rights and interests, including intellectual property rights, and explore a "safe and convenient management mechanism" for cross-border data flows.

Earlier, on August 9, US President Joe Biden signed an executive order restricting some US investments in high-tech and sensitive sectors in China. US officials affirmed that the ban was aimed at addressing national security risks, not at separating the world's two largest economies .

According to Reuters , the order allows the US Treasury Secretary to ban or restrict US investment in Chinese entities in three areas including semiconductors and microelectronics, quantum information technology and some artificial intelligence systems.

Just hours after Mr. Biden signed the measure targeting “countries of concern,” China’s Ministry of Commerce and Ministry of Foreign Affairs responded strongly.

Analysts say US investment restrictions on China will stifle venture capital and reduce foreign direct investment flows into the world's second-largest economy, while also affecting the country's technological development.