The Treasury Department on Friday fleshed out a proposed rule that would restrict and monitor U.S. investments in China for artificial intelligence, computer chips and quantum computing. The proposed rule stems from President Joe Biden`s August 2023 executive order regarding the access that `countries of concern` have to American dollars that fund advanced technologies, which the U.S. government says would enhance their military, intelligence, surveillance and cyber capabilities. The order identified China, Hong Kong and Macau as countries of concern.

The Biden administration has sought to stymie the development of technologies by China, the world`s second-largest economy, that could give it a military edge or enable it to dominate emerging sectors such as electric vehicles. In addition to the proposed rule, Democrat Biden has also placed a stiff tariff on Chinese EVs, an issue with political implications as the president and Republican Donald Trump are both trying to show voters who can best stand up to China, a geopolitical rival and major trading partner.