Washington: By designating the People's Republic of China as a "country of concern" and asserting that it seeks to take advantage of American business, President Joe Biden has signed an executive order restricting US investments in Chinese technology companies.

The order, which the White House announced in a statement on Wednesday night, requires US companies to notify the Treasury Department about certain investments in Chinese technology while outright banning other transactions.

It stated that officials would uphold Washington's "longstanding commitment to open investment," adding that the programme "will seek to prevent foreign countries of concern from exploiting US investment in this narrow set of technologies that are critical to support their development of military, intelligence, surveillance, and cyber-enabled capabilities that risk US national security."

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The order is applicable to Chinese businesses engaged in "sensitive technologies," such as quantum computing, semiconductors, and artificial intelligence. The policy will primarily target private equity and venture capital investment firms seeking to conduct business abroad on the American side.

The new regulations later drew criticism from China's Ministry of Commerce, which expressed "serious concern" and said it "reserves the right to take measures" in response.

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"We hope the US side respects the laws of the market economy and the principle of fair competition, does not artificially obstruct global economic and trade exchanges and cooperation, and does not put up obstacles for the recovery and growth of the world economy," the ministry stated.

With regard to Beijing's "rapid" technological advancements, Biden's executive order expanded on prior export restrictions on cutting-edge computer chips and even went so far as to declare a national emergency, alleging that they pose a "unusual and extraordinary threat to the national security of the United States."

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The decision was made in the midst of a trade dispute between the US and China, in which the White House has already taken action against other Chinese companies, including telecom giants Huawei and ZTE Corp. Since Biden took office, Chinese officials have repeatedly criticised US trade and technology policies. Foreign Ministry spokesperson Wang Wenbin claimed that Washington has "politicised, instrumentalized, and weaponized tech issues, and sought to thwart other countries' technological advancement."