The ban imposed by the US Treasury Department on American investments in the advanced technology sector of China, including the Hong Kong and Macao SARs, represents an overt act of economic protectionism thinly disguised as a national security measure. These investment restrictions are part of a broader strategy by the US to counter China’s growing influence in the global economy and in the field of technology. They are measures of economic suppression. By targeting investments in sectors like artificial intelligence, quantum computing and semiconductors, the US attempts to slow China’s technological advancement, using baseless claims of “military implications” as a pretext. By imposing restrictions and draconian sanctions, the US attempts to maintain its dominance in the advanced technology sectors where China has already proved to be a formidable competitor.

The claim that American investments might contribute to China’s military capacity is intentionally misleading, based merely on hypothetical scenarios. By framing commercial sectors like AI and chip manufacturing as national security threats, the US is fearmongering, hoping to justify its economic aggression. That said, the fact remains that China’s success in these fields is the result of years of independent innovation and investment, not some imagined reliance on American capital or expertise.

As a result, Hong Kong is suffering collateral damage again. The city has long been a thriving international financial hub, facilitating the flow of capital between global markets. The new investment restrictions may directly undercut this role by creating an artificial barrier.

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But Washington is also shooting itself in the foot. The US economy, which has long benefited from trade and investment with China and its HKSAR, stands to lose significant opportunities for growth and innovation. American businesses have relied on Hong Kong’s stable and open financial environment to trade in the region for decades. These restrictions will harm these relationships, leaving American and other Hong Kong-based companies worse off. For example, the US has enjoyed a significant trade surplus with Hong Kong over the last decade—an estimated $472 billion; it is now undermining the market that has contributed to its economic success. The penalties for violating this new ban, which include fines of up to $368,136 or twice the value of the prohibited transaction, are nothing short of draconian. These excessive punishments will deter legitimate business activities, forcing American companies to withdraw from the markets crucial for future growth and innovation.

Moreover, the US Treasury Department’s restrictions on investment directly attack the free-market principles that Washington claims to uphold. By arbitrarily installing investment barriers against Hong Kong, a city that has been a beacon of free trade for decades, Washington has dealt another blow to its own “moral authority” and international standing.

The investment ban has also exposed the arrogance of US policymakers, who seem to believe that American investments are the key to China’s technological success. China’s achievements in AI, quantum computing and semiconductors result from decades of domestic research and development underpinned by substantial State and private sector investments. The notion that US investment is somehow essential to China’s progress is not only wrong but deeply condescending. China will continue to innovate and grow, with or without US involvement, and it is the US that risks being left behind as it isolates itself from one of the most dynamic economies in the world.

Hong Kong Chief Executive John Lee Ka-chiu was correct in his assessment that these US restrictions will have wider global repercussions. By disrupting established trade and investment flows, they will jeopardize the stability of international supply chains. This reckless policy is symptomatic of a broader US strategy that seeks to contain China at any cost, even if it damages its own interests and destabilizes the global economy. The world is more interconnected than ever, and attempts to isolate China will only backfire, leaving the US increasingly marginalized.

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The US is choosing isolation over cooperation in a world increasingly defined by economic interdependence. This is not the behavior of a confident global leader but of a nation struggling to adapt to a shifting international order. The future of global innovation lies in collaboration, not in sanctions and restrictions. China and the rest of the world will continue to move forward, with or without US participation. The US can participate in this future, and engage in mutually beneficial trade and investment with a rising China. The question is whether the US seizes this opportunity or continues to marginalize itself through damaging and self-defeating policies.

The US’ new investment restrictions, driven by fear of losing technological supremacy, are not about protecting national security but about stifling competition, plain and simple. They will ultimately fail to halt China’s technological rise. China will continue to advance, and the HKSAR will remain a vital financial hub despite Washington’s attempts to derail its 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.