April 18, 2023

President Joe Biden’s administration has been divided at the highest levels for years over how aggressively to limit economic engagement with China. But officials now appear to be nearing an agreement on one key effort to curtail Beijing’s technological and military rise.

Unprecedented rules limiting American investments in China are expected later this month — and the administration has begun briefing industry groups like the Chamber of Commerce on the broad outlines of the executive order, which is expected to require companies to notify the government of new investments in Chinese tech firms and prohibit some deals in critical sectors like microchips.

The developments come at a particularly delicate moment for the administration, which has been trying to smooth tensions and maintain trade ties with Beijing as both economies teeter on the brink of recession. That tightrope walk highlights the challenges facing Biden’s escalation of efforts to rein in one of the world’s largest military and economic powers. Anti-China fervor is at a peak among lawmakers and the public after the Chinese flew a spy balloon over the U.S. in February. But aggressive actions to sever the relationship could risk plunging both nations into a downward economic spiral.

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