US bars 'advanced tech' firms from building China factories for 10 years

US tech companies that receive federal funding will be barred from building "advanced technology" facilities in China for 10 years, the Biden administration has said.

The guidelines were unveiled as part of a $50bn (£43bn) plan aimed at building up the local semiconductor industry.

It comes as business groups have pushed for more government support in an effort to reduce reliance on China.

They are faced with a global microchip shortage which has slowed production.

The US and China are locked in a long-running dispute over trade and technology.

In August, US President Joe Biden had signed a law committing $280bn (£232bn) to high tech manufacturing and scientific research, amid fears that the US is losing its technological edge to China.

The investments include tax breaks for companies that build computer chip manufacturing plants in the US.

The US currently produces roughly 10% of the global supply of semiconductors, which are key to everything from cars to mobile phones, down from nearly 40% in 1990.

The Chinese Embassy in Washington had opposed the semiconductor bill, calling it reminiscent of a "Cold War mentality."

Some US chipmakers are already experiencing the impact of Washington's crackdown on selling US technology to China. 

Earlier this month, Nvidia and AMD were told by US officials to stop the sale of artificial intelligence chips to China.