EU working on own, milder proposal to limit investment in Chinese tech

EU working on own, milder proposal to limit investment in Chinese tech

The EU is not immediately adopting America’s latest ban against investment in China’s tech sector. There is more interest in making its own agreements on possible restrictions.

Europe will first watch from the sidelines to see how America’s ban against investment in China’s tech sector, plays out. The ban was imposed Wednesday by Joe Biden and applies to sectors that pose “significant national security risks.”

The European Commission has now indicated in an e-mail that it is consulting on the ban with the U.S., but that it does not intend to impose the same ban in Europe. The idea for its own directives dates back to June. The plan does come from the same line of thinking, however, and is thus intended to protect against potential security threats.

Trade at stake

EU member states would rather not see a direct ban on investment worked out. After all, Europe’s economy is more dependent on China in comparison with the U.S.

China is a particularly important trading partner for France and Germany. Both countries have significant shares of meetings in the EU, making it more difficult to balance restrictions with economic interests. In response to Biden’s latest ban, Germany’s economy minister replied that it will “actively participate” in upcoming discussions on restrictions. France did not comment.

American influence palpable

Yet the American influence is already palpable as chip manufacturing machines are only made available to a limited extent in China. The export restrictions are imposed because the Dutch government fears that the equipment could also be used for military purposes by the Chinese government. Although pressure from the U.S. is also playing a large part in the decision.

Also read: Chinese AI companies avoid US sanctions by using cloud services