US President Joe Biden has signed an executive order banning American investments in key technology industries that could be used to enhance China’s military capabilities. President Biden declared the move a national emergency to deal with the threat of advancement by countries of concern in sensitive technologies and products critical to the military, intelligence, surveillance, or cyber-enabled capabilities of such countries. The order will ban venture capital and private equity firms from investing money into Chinese efforts to make semiconductors and other microelectronics, quantum computers and certain artificial intelligence applications. Administration officials said that the decision was taken to protect national security.

In a statement, the US Treasury Department said, the Biden administration is committed to keeping America safe and defending national security through appropriately protecting technologies that are critical to the next generation of military innovation. The Treasury Department called it a narrowly targeted action complementing existing export controls and that the administration maintained its longstanding commitment to open investment.