China Replies Latest US Effort to Block Beijing’s Access to Chip Technology

By Evans Momodu
4 minute read

The ongoing U.S.-China tech rivalry has intensified following the Biden administration's implementation of new semiconductor export controls aimed at restricting China's access to advanced chip-making technology.

These measures, described as the "strongest ever" by U.S. Commerce Secretary Gina Raimondo, seek to limit China's ability to develop high-end AI and military technologies. Here's a closer look at the implications of this escalating tech and geopolitical standoff:

Key U.S. Measures

1. Export Controls:

   • Restrictions cover two dozen types of semiconductor manufacturing equipment.
   • Curbs on high-bandwidth memory chips vital for generative AI and other advanced applications.
   • Further tightening of loopholes from earlier export controls introduced in 2022 and 2023.

2. Targeting Chinese Companies:

   • The U.S. Commerce Department has expanded its blacklist of Chinese firms, banning their access to American tech.
   • Restrictions are part of a broader strategy to undermine China’s ambitions to become a leader in AI and semiconductor production.

3. National Security Concerns:

   • U.S. officials argue that Chinese advancements in semiconductors could bolster their military modernisation.
   • There is growing anxiety over China's potential use of advanced tech in a Taiwan invasion scenario.

China’s Response

1. Export Bans:

   • China has retaliated by banning the sale of crucial materials like gallium, germanium, and antimony to the U.S., essential for semiconductors and EV batteries.
   • This builds on last year’s restrictions, which allowed for special permits but now closes that option.

2. Semiconductor Investments:

   • China announced a $47.5 billion state fund to support its domestic semiconductor industry, a strategic move in Xi Jinping's push for tech self-reliance.

3. Accusations Against the U.S.:

   • China’s Commerce Ministry has accused the U.S. of unilateral bullying and warned of risks to global supply chain stability.

Broader Implications

1. Economic and Industrial Fallout:

   • The restrictions escalate the decoupling of the U.S. and Chinese tech ecosystems.
   • Companies reliant on cross-border semiconductor supply chains face increased uncertainty.

2. Geopolitical Tensions:

   • The rivalry underscores growing concerns over Taiwan, which remains central to global chip production and a flashpoint in U.S.-China relations.
   • The incoming Trump administration is expected to maintain a tough stance on China, likely furthering trade and tech disputes.

3. Military and AI Race:

   • Both nations are focusing on dominating AI and next-gen military tech, with the U.S. seeking to delay China’s progress and China accelerating its domestic capabilities.

The U.S.-China semiconductor conflict reflects broader shifts in global power dynamics.

As China doubles down on its tech investments, the U.S. is aiming to outpace Beijing through alliances and domestic incentives, such as the CHIPS Act.

However, retaliatory moves like export bans on critical raw materials could lead to a prolonged and costly economic standoff, affecting industries worldwide.

The stakes in this rivalry go beyond economics, as the competition for tech supremacy is increasingly tied to national security and geopolitical influence.
Source: CNN