Yahoo Finance’s Daniel Howley joins the Live show to discuss the Biden administration’s efforts to limit China’s access to U.S. tech companies.
Video Transcript
- All right. Well, President Biden reportedly closing in on the completion of an executive order restricting overseas investments in advanced technologies by US companies in an effort to limit China's access. Here with the details is Yahoo Finance's, Dan Howley. Hey, Dan.
DAN HOWLEY: That's right, Michelle. We're looking at the potential for a new department being put into place to oversee these kinds of investments in foreign businesses. And the real thrust of this is to deal with China, and its ability to grow its technological capabilities as well as its military capabilities. And that's really where we're seeing this. These kinds of large growth areas that provide China with the ability to quickly stand up businesses as well as expand their own abilities going forward. Thanks to investment from businesses in the US. That could be managerial decisions. Things along those lines that really just help push these kinds of firms forward.
And so this would help tame some of that. And for the US and its goals, helps it cut back on China's ability to really grow and continue to be what it sees as a national security threat to the US.
- So then on a broader scope then, Dan, what companies could be impacted by this pending executive order?
DAN HOWLEY: Yeah. Look, there's a number of big name businesses, whether that's in the chip stock area, whether that's in data, things like cloud computing. There's a lot of businesses that China really has started to grow out on its own. And they're trying to become more independent of US technologies. And so the flip side is [INAUDIBLE] going to be dependent on the US technologies. It'll be dependent on US expertise from these kinds of investments that we're seeing. And so that really could be the catalyst to help push China and its own efforts forward.
I think for the US, that's the fear. Is that, look, we can ban the sale of technologies. We can ban things like that. But we can't ban investment. And so what they're trying to do is tamp down on that. If it's deemed that some of these investments would benefit both the commercial and military side of things, then the US would likely rule against companies being able to invest into China in those sectors. And so you can expect this to be a hotly debated topic going forward. It's expected to come through as part of Biden's upcoming budget proposal.
But look, there's going to be directors who say we should be able to invest our money as we see fit. Regardless of where it goes. And obviously, from Washington's side of things, it's going to be, well, that would be a national security threat to the US. And it's one of those rare bipartisan issues I think that you're getting out of Washington at this point is kind of the anti-China sentiment or anti-Chinese government sentiment. And so that could be a benefit to this provision in the Biden budget.
- Certainly in protecting those investments of the future that are really key to both of these global economies. Big thank you there to Dan Howley.
