The restrictions target investments related to microchips, quantum technology and artificial intelligence.
The presidential order aims to curb China’s ability to exploit US investment for military purposes, and the restrictions are therefore narrowly drawn, according to senior government officials.
The restrictions are introduced with reference to US national security, rather than economic motives, the authority sources underline.
Beijing responded on Thursday that the new policy seriously “disrupts the security of global industrial and supply chains,” according to a statement from China’s Ministry of Commerce.
The trade conflict between the US and China gained momentum under the Trump administration in 2018. Since then, geopolitical tensions have only increased and in recent years have increasingly expressed themselves in a technological race.
Both the US and China have imposed trade restrictions against each other, targeting new and advanced technologies, citing national security.
Last August, China imposed export restrictions on the earth metals gallium and germanium, which are critical to making semiconductors, used in everything from fighter jets to phones.