China Urges U.S. to Drop Expanded Curbs on Investment in Chinese Technology

China’s commerce ministry urged the United States on Saturday to stop expanding restrictions on American investments in China, saying a proposed rule on sensitive technologies would disrupt trade ties. The ministry said in a statement that the proposal widened China-related investment restrictions in a discriminatory way and intensified curbs, according to Reuters.

Beijing said it firmly opposed the proposal and reserved the right to take unspecified countermeasures. It also said the proposal would damage bilateral economic ties and run counter to the consensus reached by the two countries’ presidents, who have met twice in the past six months.

What the Treasury proposal would change

The Treasury Department issued proposals on Thursday to update its outbound-investment security program, adding biotechnology to restricted sectors and expanding coverage of high-performance computing and hypersonic systems, according to Reuters. The program had already restricted certain United States investments involving China in semiconductors, quantum technologies, and artificial intelligence.

The proposed rule, issued October 22, 2026, implements the Comprehensive Outbound Investment National Security (COINS) Act, which Congress passed as part of the fiscal year 2026 National Defense Authorization Act, according to BioPharm International. The act names five sectors: semiconductors and microelectronics, artificial intelligence, quantum information technologies, high-performance computing, and hypersonic systems. It also gives the Treasury secretary authority to add technologies that enable the military, intelligence, surveillance, or cyber-enabled capabilities of a country of concern, and the secretary used that authority to add biotechnology.

According to a Treasury fact sheet cited by BioPharm International, the proposed rule would prohibit United States investment involving certain bio-derived compounds or materials, brain-computer interfaces, biomanufacturing equipment and facilities, biotechnology or equipment involved in biological design and sequencing, bioinformatics tools, and hardware or software for automated scientific discovery or experimentation.

The countries of concern are China, Hong Kong, and Macau, along with Cuba, Iran, North Korea, and Russia. Covered transactions center on equity investments, convertible debt, joint ventures, greenfield investments, and certain limited partner investments. Contractual arrangements are excepted, but the exception does not extend to arrangements for technology transfer or technical knowledge transfer, according to BioPharm International.

How Washington and industry describe the stakes

The Treasury Department has said the measures do not cover only China. The department said they are intended to stop United States capital from supporting foreign adversaries’ development of dual-use strategic technologies that could threaten national security, according to Reuters.

Treasury Secretary Scott Bessent said the proposed regulations would strengthen the existing program to prevent adversaries from using United States investment to develop technologies that threaten national security, according to BioPharm International.

MassBio, which represents more than 1,700 members of the Massachusetts life sciences industry, said efforts to address national security risks must be carefully targeted to avoid undermining the innovation system that has made the United States a leader in developing new medicines, according to BioPharm International. The group said it intends to submit comments on the proposal.

Treasury is inviting comments on all aspects of the proposal, including the scope of covered transactions, definitions, notification requirements, and penalties. Comments are due December 7, 2026. Final regulations, which will set the program’s effective date, will follow at a later date, and existing rules keep applying until then.

Reporting based on coverage by Reuters and BioPharm International.