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The US Plans To Use Revenue Rule To Limit The Scope Of China Investment Ban
Last Updated on: November 16th, 2024
The US Government made plans to restrict investment in China. However, as per reports, the restriction is to be applied to only those Chinese companies that get at least half of their revenue from cutting-edge sectors such as AI and quantum computing.
The US applies the revenue rule toward the implementation of the plan, as this provision is about to limit the scope of the restriction. The restriction comes as an executive order by the Government, as it will be unveiled in a few days. The move is a push to limit Chinese access to technology.
According to Bloomberg.com,
?The rule would allow US private equity and venture capital firms to put their money in larger Chinese conglomerates that may have artificial intelligence divisions but get most of their revenue from other sources.?
As per reports, this Government order will prohibit AI-related investments for users at the military end. It will also require notifications in case of investments in other AI-related stuff. It will also ban investments in some activities related to quantum computing, especially encryption, sensing, and some types of super-advanced semiconductors.
However, the order is expected to take about a year to come into full force. This is because the making of the rule and additional comments from the industry will take that much time. Hence, within this period, there will not be any restrictions on investments.
In short, the rule will prohibit investors from investing in the most advanced semiconductors, some special areas of quantum computing, and AI activity for users in the military. Investments in other Chinese AI-related activities will require notification. This rule is basically an effort to limit China?s access to American technology.
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