Washington DC - President Joe Biden on Wednesday issued an executive order restricting all US investments in technologies considered "sensitive" produced in China.

Biden announced the decree saying he was "declaring a national emergency to deal with the threat of advancement by countries of concern in sensitive technologies and products critical to the military, intelligence, surveillance, or cyber-enabled capabilities of such countries."

Under the executive order, Biden identified China, including Hong Kong and the special administrative region of Macau, as a "country of concern."

He said the measure was designed to protect national security and was not meant to be a brake on investment.

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According to the Biden administration, the tightened rules will affect semiconductors, certain artificial intelligence systems, and quantum information technologies.

Strict reporting requirements are also to be introduced for certain investments.

The plan follows a similar mechanism whereby certain large foreign investments in the US are pre-screened in sensitive areas.

When Biden came into office in January 2021, he left in place the draconian tariffs against Beijing which his predecessor Donald Trump had put into force.

Biden also initiated large-scale investments in the US to bolster Washington's supply chains and secure more independence from China, while also imposing export restrictions to deny the country access to US technologies.

China on Thursday responded angrily to Biden's executive order, calling it a violation of free market principles.

"China will follow the developments closely and resolutely safeguard our rights and interests," a Beijing Foreign Ministry spokesperson said on Thursday.

Washington's real goal, the spokesperson said, "is to deprive China of its right to develop and selfishly pursue US supremacy at the expense of others."

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"This is blatant economic coercion and tech bullying, an act that seriously violates the principles of market economy and fair competition, undermines the international economic and trading order, destabilizes global industrial and supply chains, and hurts the interests of both China and the US and the global business community," the spokesperson continued.

US-China relations – already at an all-time low – are likely to be strained even further by Biden's aggressive move.