The Albanese government may ban Australian investment in sensitive technology projects in China, mirroring a move by the US.

US President Joe Biden recently prohibited American firms from investing in Chinese companies working on advanced semiconductors, quantum tech, and AI with military or intelligence connections.

The White House has reportedly discussed this ban with Australia, even though the US has not formally requested such action. 

American officials allegedly suggest that other nations are likely to adopt similar restrictions after their talks with allies.

Australia has already imposed limits on inbound Chinese investment due to national security concerns. 

The ongoing exclusion of Chinese tech firms, like Huawei, from its 5G network construction remains a sore point with China.

The potential ban coincides with Australia's efforts to stabilise trade relations with China after recent tariff negotiations. However, the US discussions underscore a growing gap in the strategic approaches of Washington and Canberra toward China.

Experts suggest a cautious approach, emphasising that technologies crucial for both economy and security should be handled prudently. 

Meanwhile, a major defence pact between Australia and Japan, set to begin soon, aims to strengthen their regional cooperation.