Macro
China says it firmly opposes US plan to widen investment curbs and reserves the right to retaliate
Beijing's commerce ministry calls Treasury's draft rule, which adds biotech to the restricted list, discriminatory and says it clashes with the two presidents' consensus.
HedgeWeekly News Desk ·
China's Ministry of Commerce on Saturday urged Washington to stop widening its restrictions on American investment in China, saying a proposed US rule on sensitive technologies would disrupt trade between the two countries. In a statement reported by Reuters from Beijing, the ministry said it firmly opposed the plan, called it a discriminatory expansion of China-related curbs, and reserved the right to take countermeasures, without saying what they would be.
The target is a draft rule the US Treasury released on Thursday, October 22, the first under the Comprehensive Outbound Investment National Security (COINS) Act passed with the fiscal 2026 defence bill. It would put biotechnology on the restricted list for the first time and broaden coverage of high-performance computing and hypersonic systems, adding to existing curbs on semiconductors, quantum technologies and artificial intelligence. Treasury says the regime is not aimed only at China and is meant to stop US capital from funding foreign adversaries' dual-use strategic technologies.
Beijing said the proposal would damage economic relations and runs against the consensus reached by the two countries' presidents, who have met twice in the past six months. China already has a legal basis for a response: a State Council regulation on outbound investment, in force since July 1, lets the commerce ministry investigate foreign investment barriers and allows authorities to adjust country-specific investment policies, restrict trade in goods and technology, and sanction those taking part in discriminatory measures under the Anti-Foreign Sanctions Law.
Why it matters: the US draft exempts publicly traded securities, index funds, mutual funds, ETFs and limited-partner commitments of $2 million or less, so its direct compliance burden falls on venture, private equity and fund-of-funds investors in Chinese technology and biotech. Saturday's statement adds a second layer of risk for those investors, since China's own rules allow it to restrict foreign firms' investment in China or their trade in technology with it. Comments on the US proposal are due December 7, 2026, the start date will be fixed only in a final rule, and Beijing has not said what form any countermeasure would take.
Sources
- Business Recorder (Reuters): China urges US to halt proposed expansion of outbound investment curbs
- Lufkin Daily News (Reuters): China urges US to halt proposed expansion of outbound investment curbs
- Global Times: China unveils outbound investment rules
- BioPharm International: Treasury proposes adding biotech to outbound investment restrictions under COINS Act
- Unite.AI: Treasury proposes rules to expand outbound tech investment curbs