Treasury proposes curbs on US investment in Chinese high-tech and biotech

The US Treasury has proposed a rule to crack down on high-tech investments in China and other adversaries^3,5. The proposed curbs cover high-tech investments in China, Russia and North Korea^1,6. The proposal would tighten the rules on investing in sensitive Chinese technology².

The proposal also adds biotechnology to the outbound investment restrictions¹¹. The Trump administration’s plan would put new curbs on China biotech deals⁴. In a statement on the OISP plan, Treasury Secretary Scott Bessent said that “the biotechnology sector in countries of concern enables the military”⁷. A document detailing the potential new rule records that Bessent made a determination about “the biotechnology sector in countries” of concern⁸.

Bessent also said the rules would promote an “open investment environment” by providing clarity to investors in the United States and abroad². These are the Treasury’s own descriptions of the rule’s purpose and effect; the proposal has not yet been finalised^2,3.

Why it matters to investors

The biotech provisions reach a sector in which Western drug giants have invested tens of billions of dollars in Chinese biotechs⁴. The rule could impose new hurdles on those deals⁴. The Treasury’s move is aimed at curbing investment in China’s biotech industry⁸.

The country list is notable. The inclusion of Russia in the proposed rule comes days after Trump waived sanctions on Russia following a diesel deal with President Vladimir Putin^9,10. The proposal therefore tightens one channel of economic pressure on Moscow as another was loosened⁹.

The proposal also comes after Trump and Chinese President Xi Jinping agreed last year to an easing in parts of their relationship, according to coverage of the rule¹⁰. For investors, the rule would add US screening to deals in sensitive Chinese technology and biotech^2,4.

What to watch

Because the measure is a proposal, its final scope, including which sectors and countries it covers, can still change before it takes effect^2,3. Investors will watch how the final text treats the kind of biotech deals Western drug giants have pursued in China⁴.

The proposed rule names China, Russia and North Korea, and the list of countries is one of the elements investors will follow as the process continues^1,6. They will also watch whether the Treasury’s stated aim of clarity for investors holds once the details are published, and how the Russia provisions sit alongside the recent sanctions waiver^2,9.