U.S. President Joe Biden on Wednesday signed an executive order that will prohibit some new U.S. investment in China in sensitive technologies like computer chips, and require government notification in other technology sectors. The long-awaited order authorizes the U.S. Treasury secretary to prohibit or restrict U.S. investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems. The administration said the restrictions would apply to "narrow subsets" of the three areas but did not give specifics. The proposal is open for public input.

President Biden escalated his confrontation with China on Wednesday by signing an executive order banning American investments in key technology industries that could be used to enhance Beijing's military capabilities, the latest in a series of moves putting further distance between the world's two largest economies. The order will prohibit venture capital and private equity firms from pumping money into Chinese efforts to develop semiconductors and other microelectronics, quantum computers and certain artificial intelligence applications. Administration officials stressed that the move was tailored to guard national security, but China is likely to see it as part of a wider campaign to contain its rise. "The Biden administration is committed to keeping America safe and defending America's national security through appropriately protecting technologies that are critical to the next generation of military innovation," the Treasury Department said in a statement. The statement emphasized that the executive order was a "narrowly targeted action" complementing existing export controls and that the administration maintained its "longstanding commitment to open investment."