A Chinese official has strongly criticized a new US Treasury proposal to broaden and tighten investment restrictions on China, calling it discriminatory and an overreach of national security concerns. The Commerce Ministry warned that the rule could harm economic ties between the two countries and hinted at potential countermeasures, though no specifics were provided.
The US Treasury's proposed rule, announced last Thursday, expands the Outbound Investment Security Program to include stricter limits on US investments in sectors like hypersonics, quantum computing, high-performance computing, supercomputing, AI, and now biotechnology in China, Russia, and North Korea.
In response to the news, the Australian Dollar (AUD), often seen as a China proxy, edged lower. At the time of writing, the AUD/USD pair was down 0.09% on the day, trading at 0.7028.
The escalating tensions come amid a renewed US-China trade war, which has intensified since Donald Trump's return to the White House in January 2025. Trump's administration has imposed 60% tariffs on Chinese goods, reigniting tit-for-tat policies that disrupt global supply chains and contribute to inflation.