While noting the U.S. Treasury’s recent regulations prohibiting U.S. outbound investment in sectors such as semiconductors, artificial intelligence, quantum technology, biotechnology, hypersonics, aerospace, advanced manufacturing, and directed energy, the document added that the Trump administration “will consider applying restrictions on investment types including private equity, venture capital, greenfield investments, corporate expansions, and investments in publicly traded securities, from sources including pension funds, university endowments, and other limited-partner investors. It is past time for American universities to stop supporting foreign adversaries with their investment decisions, much as they should stop granting university access to supporters of terrorism.”

Although it is hard to predict whether or to what extent these restrictions will be applied, it may be prudent for U.S. institutional investors to review their investments in China strategies and to audit the relevant managers for compliance with current U.S. law, including the U.S. executive orders on Chinese military companies and the recent U.S. Treasury regulations referenced above. It may also be appropriate to review the liquidity terms of open-end or separate accounts and funds of one with a focus on Chinese public securities.

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Newsflash 2025-074