China Planning Response to US Outbound Investment Rules, Commerce Ministry Says

China is planning “countermeasures” to respond to the Biden administration's recent executive order on outbound investment, a Chinese Ministry of Commerce spokesperson told reporters this week. The spokesperson said China has “serious concerns” about the restrictions -- which will eventually lead to prohibitions and notification requirements for U.S. investment in three advanced technology sectors in China -- and said the U.S. is “harming others and harming itself.”

The commerce ministry recently held discussions with companies to “understand the actual impact of the administrative order on enterprises,” the spokesperson said, according to an unofficial translation. “On this basis, we are conducting a comprehensive assessment of the impact of the executive order and will take necessary countermeasures based on the assessment results.”

The spokesperson also said the ministry has received multiple license applications from Chinese companies seeking to export gallium and germanium, two metals used to produce semiconductors that were made subject to export controls by Beijing effective Aug. 1 (see 2307050018 and 2308150028). The ministry is reviewing these applications and will make decisions on whether to grant them after “comprehensive consideration of national security and interests, international obligations, end users and end uses, etc.”

The controls are “prudent and moderate, with the purpose of safeguarding national security and better fulfilling international obligations,” the spokesperson said. “The Ministry of Commerce will timely adjust and improve the export control list of dual-use items in accordance with the provisions of the Export Control Law.”

The spokesperson also said Beijing would welcome a visit from Commerce Secretary Gina Raimondo, and said the two sides are discussing a date. “China and the U.S. are in close communication on the arrangements for the visit,” the person said.