Beyond China, Asia will bear the brunt as US builds walls around tech capital
Outbound investment rules introduced last year are expanding and hardening into law, chilling US investment across Asia’s tech ecosystems
These rules are gaining teeth, giving rise to a compliance architecture that conditions US foreign direct investment on national security priorities. As firms begin to operationalise these rules, capital is likely to pull further away from China’s technology ecosystem. The most significant consequences, however, will not be borne by China alone: they will fall on Asian economies whose technology supply chains are deeply integrated with China across critical sectors.
Under the US Department of Treasury’s programme, outbound investment rules apply when an American person or company makes an investment that gives them a meaningful stake in certain sensitive technology activities that “enable the military, surveillance or cyber-enabled capabilities of a country of concern” – namely, China.