China Urges US to Halt Expansion of Outbound Investment Curbs

China’s commerce ministry on Saturday urged the United States to stop widening restrictions on American investment in China, saying a newly proposed US rule targeting sensitive technologies would harm economic ties between the two countries, Reuters reported.

The statement from Beijing came two days after the US Treasury Department unveiled proposals on Thursday to update its outbound investment security programme, adding biotechnology to the list of restricted sectors and broadening coverage of high-performance computing and hypersonic systems.

What Beijing said

In its statement, the Ministry of Commerce said the US proposal expanded China-related investment restrictions in a discriminatory way and tightened existing curbs, according to Reuters. The ministry said it “firmly opposed” the move and reserved the right to take countermeasures, without giving details.

The ministry said the proposal would damage bilateral economic and trade relations and ran against the consensus reached by the two countries’ presidents, who have met twice in the past six months, Reuters reported.

China’s Foreign Ministry had already criticised the plan. Spokesperson Mao Ning, asked about the biotechnology element, said stretching the concept of national security and taking discriminatory steps against specific countries served no one’s interests, the Associated Press reported. She said China would closely follow developments and take necessary measures to protect its interests, and that the US should respect market-economy principles and stop interfering in normal business cooperation.

What the US Treasury proposed

According to the AP, the proposed rule would restrict American high-tech investments, including in supercomputing and artificial intelligence, in China, Russia, North Korea and other “countries of concern”. Treasury said the measures, which are not limited to China, are meant to stop US capital from helping foreign adversaries develop dual-use strategic technologies that could threaten US national security, Reuters reported.

The programme already restricted US investment involving China in semiconductors, quantum technologies and AI. The AP said it began in 2023 under an executive order from then-President Joe Biden, and that Congress in December 2025 passed the Comprehensive Outbound Investment National Security Act, which codified and expanded it to more technologies and countries, including Cuba, Iran, North Korea and Russia.

The proposal would apply only to investments above US$50,000 and excludes many financial investments, including stock purchases, the AP reported. It also covers hypersonic systems and biotechnology, and uses the term “superintelligence” in relation to AI.

Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, told the AP the rule signals to markets that Washington is tracking where US capital goes. Jason Chipman, a partner at WilmerHale, said it would require more substantial compliance programmes to manage risk.

What’s next on Investment

Treasury will take public comments on the proposal before issuing a final rule, the AP reported. Ryan Majerus, a King & Spalding partner and former US trade official, described it as “just the first step in a fairly long process” and said changes were likely to be more focused on enforcement.

The dispute comes as a trade truce between US President Donald Trump and Chinese President Xi Jinping was extended last month into January, according to the AP. China’s commerce ministry has not said what countermeasures it might take.

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