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US restricts Chinese access to semiconductors

October 8, 2022

The US says it wants to keep its "sensitive technologies" away from China's military and security services. But China said the move would hurt businesses on both sides.

US Secretary of State Antony Blinken, right, and China's Foreign Minister Wang Yi attend a meeting in Bali
The US is seeking to slow down China's technological riseImage: Stefani Reynolds/AP/picture alliance

The US has decided to curtail China's ability to buy certain semiconductor chips created with US equipment in an effort to set back the country's technological and military progress.

The US Department of Commerce was introducing new controls that would restrict the export of chips used in supercomputing. According to the Friday statement, they are also raising the criteria for the sale of semiconductor equipment.

The aim is to keep "sensitive technologies with military applications" away from China's military, intelligence and security services, said Commerce Department official Alan Estevez.

The decision is reminiscent of US measures to set back competitors during the Cold War. It could leave a significant dent on China's technological and military advances.

Why did the US take this decision?

The measures came in a bid to protect US national security and foreign policy interests, Commerce Department official Alan Estevez said.

The US argues that the chips can be used to create advanced military systems which include weapons of mass destruction, or that China could utilize them for unethical purposes.

The move comes amid rising tensions between both countries. Semiconductors' manufacture and export have always been at the heart of their technological race. This summer, the Biden administration passed a $280 billion (€287.5 billion) measure to boost the US semiconductor industry.

China has also poured resources into the same sector. However, it's not yet capable of producing its own high-end chips to furnish advanced computing devices.

President Joe Biden signs The CHIPS and Science Act of 2022 surrounded by members of the House and Senate on White House lawn in Washington, DC
US President Joe Biden said China had lobbied against the multibillion-dollar Chips and Science act last summerImage: Bonnie Cash/UPI Photo/IMAGO

On Saturday, Beijing said the restrictions amount to an abuse of trade measures and aim to reinforce the US "technological hegemony." Foreign Ministry spokesman Mao Ning warned that the measure would hurt US businesses along with the Chinese ones.

How effective is the latest measure?

The effectiveness of the latest US restrictions on China's technological purchases is likely to depend on the response rate of US allies.

Senior US government officials acknowledged in a briefing on Thursday that they had yet to secure solid promises from allies that they would implement similar measures.

"We recognize that the unilateral controls we're putting into place will lose effectiveness over time if other countries don't join us," Reuters news agency quoted one official as saying. "And we risk harming US technology leadership if foreign competitors are not subject to similar controls."

Huawei and 5G: A risk worth taking?

Chinese giant phone manufacturer Huawei has come under US fire in recent years, with the US preventing home network suppliers from giving it access to next-generation networks. It also lobbied for similar restrictions in other parts of the world, massively curtailing the brand's world-wide popularity.

The company was accused of colluding with the Chinese government amid fears of the government using the phones' technology to spy on their owners.

rmt/dj (AFP, AP, Reuters)