China opposes expanded U.S. investment restrictions, threatens retaliation
China has criticized a U.S. Treasury Department proposal to tighten restrictions on American investments in Chinese companies. Beijing called the initiative discriminatory and warned that it could take retaliatory measures.
China's Ministry of Commerce issued the statement, arguing that Washington is applying an overly broad interpretation of national security threats to restrict economic cooperation.
The dispute was triggered by a proposal from Donald Trump's administration to add biotechnology to the list of sensitive industries subject to restrictions on U.S. investors.
Beijing accuses Washington of politicizing trade
Chinese authorities said the new measures contradict agreements reached by the presidents of the two countries and could damage bilateral trade and economic relations.
"China urges the United States to respect the laws of the market economy, stop overstretching the concept of national security and refrain from politicizing economic and trade issues," the ministry said in its statement.
The ministry also stressed that the restrictions could harm the interests of American companies working with Chinese partners.
Beijing intends to closely monitor developments and reserves the right to take appropriate measures. Authorities did not specify what retaliatory steps they might consider.
Washington's proposal would expand the existing framework for screening investments in technologies that U.S. authorities consider potential national security risks.
Biotechnology becomes a new flashpoint in trade dispute
Tighter rules could complicate financial ties between the world's two largest economies. The initiative is particularly significant for the U.S. pharmaceutical industry, whose companies are increasingly turning to Chinese developers in their search for new medicines.
The restrictions could affect investment agreements and funding for biotechnology research. However, the final details of the proposed changes have not yet been approved.
The trade dispute comes amid declining foreign capital inflows into China. During the first nine months of 2026, the country recorded another decline in foreign direct investment, although the pace of contraction slowed compared with previous periods.
At the same time, high-tech industries recorded growth in capital inflows. China's non-financial outbound direct investment reached $101 billion during the reporting period, indicating that domestic companies remain active in international markets.
Earlier, we reported that China tightened oversight of spinoffs by publicly listed companies. The new measures introduced stricter regulation of corporate restructuring in the country's stock market.