The US has intensified its campaign against China technology sector with a flurry of export prohibitions and strangling business regulations, leaving Beijing with limited alternatives for retaliation.
Last week, US President Joe Biden’s administration intensified its efforts to stymie its main geopolitical rival by placing dozens of Chinese tech companies on a blacklist.
US-China Tech War
At the same time, there were signs that Japan and the Netherlands were joining US restrictions on selling chip-making equipment to China, which would have dealt with Beijing’s ambitions to produce advanced conduct.
In retaliation, China has charged the US with protectionism, filed a grievance with the World Trade Organization, and courted South Korea, a significant ally of the US Given the extensive usage of chips in everything from vehicles and mobile phones to guided missiles, Beijing is also apparently considering a multibillion-dollar aid package for its semiconductor industry. This industry is an important one for the world economy.
Any attempts to block US investment threaten an economy already suffering from President Xi Jinping’s zero-tolerance Covid policies, which are only now being reversed in a manner reminiscent of Beijing’s actions during the trade war with the former administration of President Donald Trump, when it threatened to add US companies to a list of unreliable entities but failed to do so.
The Biden restrictions severely constrained China’s ability to purchase those foreign chip-making machines clients can no longer buy cutting-edge technology from American gear manufacturers Applied Materials, Lam Research, and KLA. However, Tokyo, the Electron of Japan, and ASML Holding of the Netherlands must work together for a total blockade to succeed.
As Japan and the Netherlands close an agreement to join Washington in strengthening controls over the transfer of modern chip-making machinery to China, those US efforts gained steam this week. In act guidelines Washington laid forth in October, the two governments are considering biting the sale of equipment capable of producing chips at least three generations behind the most recent innovations on the market.
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China Advances In Technology
The leading Chinese manufacturer of memory chips, Yangtze Memory Technologies, is also included on the list. In the markets and mobile phone components, market Memory Technologies competes with Samsung Electronics and Micron Technology, and it was even in discussions to supply Apple.
Even if China prevails in the WTO dispute, the US can challenge any decision by the trade body’s appellate panel, which the Trump administration paralyzed in 2019.
China’s best course of action might be investing in creating its own advanced chips. Beijing is getting to launch a $143 billion assistance program for its chip industry.
However, it’s it needs to be clarified much of an effect this will have given the erratic performance of the tens of billions of dollars that China has previously invested in the industry.
Wide-ranging new restrictions were put in place by the US in October to limit access to technology that is essential to the production and use of its military might. The US claims that the businesses added to the lists reprethreatenonal security, particularly by supporting hypersonic missiles and artificial intelligence technology.
The most recent actions take took shortly after President Joe Biden and Chinese President Xi Jinping had their first face-to-face meeting. The discussions served springboard for improved dialogue between the two global superpowers.
In the UAs part of its announcement on Thursday, the US also stated that it was removing several Chinese businesses from the monitoring list after determining that they did not constitute a threat to US national security.
Read more: Chip war: Japan, Netherlands join US in export efforts to deter China’s technological aspirations.