First came tariffs on Chinese imports, then several rounds of sanctions and an outright embargo on exports of state-of-the-art computer chips. Now, America’s multiyear campaign to deter, counter and stymie Xi Jinping’s China—an effort that started with President Donald Trump and has escalated under the current administration—is shifting to a new battleground where the stakes are even higher than in trade or technology: finance.

Last August, President Joe Biden directed the Department of the Treasury to draw up rules barring US investments in entities suspected of helping to develop next-generation weaponry for China’s war machine. Soon, probably in the next few months, that ban will go into effect.

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