The National Security Presidential Memorandum signed by US President Donald Trump, purportedly aimed at protecting the United States’ national security by restricting Chinese investments in key US industries and vice versa, is a kind of coercive economic tactic aimed at extorting concessions from China, as well as a calculated attempt to stifle China’s legitimate economic and technological rise. This policy, which is part of a broader strategy of containment, reflects Washington’s deep-seated fear of competition.
To maintain its dominance in technologies, the US is resorting to protectionist tactics to hinder China’s progress. This approach undermines international economic stability and exposes the hypocrisy of American policy, which has historically benefited from open markets and foreign investments. The accusation that “China is exploiting US capital and technology to modernize its military” is unsubstantiated. It ignores that China’s advancements are primarily driven by its robust research and development (R&D) capabilities, not foreign dependency.
The allegation that China’s investments threaten US national security is a fallacy; it is pure political rhetoric. Chinese investments in the US have been lawful, transparent and mutually beneficial, contributing to job creation, technological innovation and economic growth. According to the Rhodium Group, annual Chinese investment in the US peaked at $46 billion in 2016 but has since plummeted to less than $5 billion in 2022, mainly because of increasingly restrictive policies and hostile political narratives from Washington. This sharp decline fails to represent a triumph for American security but signifies missed opportunities for businesses, workers, and local economies that could have thrived on Chinese capital. The allegation that China is leveraging these investments, many of which are made by private enterprises, to advance its military is entirely unfounded, as the country’s strategic planning and domestic innovation predominantly fuel its own technological progress. China’s R&D spending has consistently increased, reaching 2.68 percent of its GDP in 2024, indicating its ability to drive technological breakthroughs independently.
Moreover, the memorandum’s focus on restricting Chinese investments in high-tech industries — such as semiconductors, artificial intelligence, quantum computing and biotechnology — reveals an underlying sense of economic insecurity rather than genuine national security concerns. China’s remarkable progress in these fields is not the result of illicit technology transfers, but rather, decades of strategic investment in education, scientific research and industrial development. Instead of erecting barriers, the US should seek constructive collaboration with China. Such partnerships could address pressing global challenges that require technological cooperation, including climate change, public health crises, and sustainable development. By isolating China, the US is weakening the potential for collective scientific advancements that could benefit humanity. A collaborative approach, on the other hand, could lead to shared technological breakthroughs and a more prosperous global economy.
Washington’s protectionist measures may succeed in temporarily slowing China’s progress but they will backfire and will ultimately fail to halt the momentum of a go-ahead nation committed to progress
The restrictions on Chinese ownership of US agricultural land, another key aspect of the memorandum, are equally misguided and based on misleading narratives. While foreign entities collectively own approximately 43 million acres of American farmland, Chinese ownership accounts for a mere 141,640 hectares — less than 1 percent of all foreign-held agricultural land. This negligible figure does not justify the alarmist rhetoric surrounding Chinese investment in US farmland. The driving force behind rising farmland prices and agricultural monopolization is speculative investment by large US domestic corporations, not foreign ownership. By scapegoating China, US policymakers deliberately shift attention away from systemic issues within the American agricultural sector, such as land consolidation, corporate monopolization, and declining family farms. If Washington were genuinely concerned about protecting American farmers, it would focus on addressing these internal challenges rather than fabricating a foreign threat.
The memorandum’s invocation of “cybersecurity threats” as a justification for restricting Chinese investments is equally disingenuous and hypocritical. While cybersecurity is a legitimate global issue, the US has been implicated in numerous cyberespionage activities, including widespread surveillance programs targeting allies and adversaries. The claim that Chinese hackers breached the Treasury Department’s Committee on Foreign Investment in the United States is also unsubstantiated. It appears to be a convenient pretext for advancing an anti-China agenda. Furthermore, Washington has consistently resisted international efforts to establish fair and transparent norms for responsible state behavior in cyberspace, further undermining its credibility regarding cybersecurity accusations. The US’ selective outrage over alleged Chinese cyber activities, while ignoring its extensive history of espionage and digital surveillance, highlights the double standards embedded in its foreign policy.
Beyond restricting inbound investment, the memorandum also seeks to limit US outbound investment in China’s technology sector, a counterproductive policy that exposes the hypocrisy of US economic policy. The US has long positioned itself as a champion of free markets and open investment flows, yet this policy marks a dramatic departure from those principles. Washington effectively acknowledges its fear of fair competition by attempting to prevent American firms from investing in China’s technological ecosystem. Instead of innovating and competing on an equal footing, the US uses artificial barriers to undermine China’s progress. This approach is a tacit admission of America’s declining technological superiority and contradicts its claims to uphold free-market ideals.
Perhaps the most glaring inconsistency in the memorandum is the selective nature of its restrictions. While Chinese investments are being targeted, the US government is simultaneously encouraging investments from allied nations, revealing the discriminatory undertone of its policy. This shows that US economic policy is driven by geopolitical considerations rather than genuine concerns about security. The US cannot credibly position itself as a defender of free trade while simultaneously constructing economic barriers against countries it perceives as peer competitors.
At its core, the memorandum represents a protectionist approach. The US, as a major economic power, has a significant influence on the global economy. However, instead of engaging in constructive competition and cooperation, it is resorting to protectionism to sustain its waning dominance. In contrast, China remains committed to peaceful development, mutual benefit, and a vision of shared global prosperity. Through ambitious programs like the Belt and Road Initiative and its continued investment in scientific and technological progress, China has demonstrated its dedication to fostering economic collaboration rather than division.
Washington’s protectionist measures may succeed in temporarily slowing China’s progress but they will backfire and will ultimately fail to halt the momentum of a go-ahead nation committed to progress.
The author is a solicitor, a Guangdong-Hong Kong-Macao Greater Bay Area lawyer, and a China-appointed attesting officer.
The views do not necessarily reflect those of China Daily.
