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Biden's New Chip Curbs Trigger Strong Chinese Industrial and Government Response

AInvestTuesday, Dec 3, 2024 8:06 am ET
2min read

Following the announcement by the U.S. government of a new round of export restrictions on China, including the addition of over 140 Chinese companies to the trade restriction list involving semiconductor manufacturing equipment, electronic design automation tools, and various types of semiconductor products, the Internet Society of China (ISC) issued a statement, calling on domestic enterprises to proactively take countermeasures, prudently select the procurement of U.S. chips, seek to expand cooperation with chip enterprises from other countries and regions, and actively use chips manufactured by domestic and foreign-funded enterprises in China.

In its statement, ISC claims the U.S. has further increased restrictions on semiconductor exports to China under the pretext of national security and has caused substantial damage to the healthy and stable development of China's internet industry.

The U.S. frequently adjusts control rules, continuously upgrades trade barriers, disregards international trade rules, and generalizing the concept of national security as well as abusing export control measures to arbitrarily block and suppress China has shaken Chinese companies' trust and confidence in U.S. chip products.

Therefore, to ensure the security, stability, and sustainable development of China's internet industry, ISC calls on domestic enterprises to proactively take countermeasures, prudently select the procurement of U.S. chips, seek to expand cooperation with chip enterprises from other countries and regions, and actively use chips manufactured by domestic and foreign-funded enterprises in China.

On the same day, the China Association of Automobile Manufacturers (CAAM), the China Semiconductor Industry Association (CSIA), and the China Association of Communication Enterprises (CACE) also published similar statements on their respective public accounts, expressing concerns about the reliability and security of U.S. chips.

CSIA claims actions from the U.S government once again undermine the consensus and WTO fair trade principles that the global semiconductor industry has long reached, violate the spirit of the World Semiconductor Council (WSC) charter that global semiconductor companies jointly follow, and hurt the efforts of global semiconductor practitioners to unite and cooperate. The arbitrary modification of trade rules by the U.S. government has already caused substantial damage to the safety and stability of the global semiconductor industry chain.

Meanwhile, CAAM also expressed its firm opposition against the U.S. government's arbitrary expansion of the concept of national security, the abuse of export control measures, and malicious blockade and suppression of China. Such actions seriously violate market economy principles and fair competition, disrupt international economic and trade order, disturb the stability of the global industrial chain, and ultimately damage the interests of all countries.

As for CACE, It believes that the U.S., under the guise of national security, abuses national power to suppress Chinese companies. This is a blatant act of economic and technological bullying and a blatant denial of the market economy principles that the U.S. has always advocated, damaging the legitimate rights and interests of China's information and communication industry and global consumers, including U.S. users. The U.S. should stop the wrong practices of generalizing the concept of national security and politicizing economic issues, and create a fair, just, and non-discriminatory environment for the development of enterprises from various countries.

CACE also criticizes the U.S. government's attempt to continue generalizing the concept of national security, arbitrarily modify control rules, and restricting the supply of chips and semiconductor equipment to China, as they not only seriously damage international trade rules but also cause substantial damage to the safety and stability of the industrial chain and supply chain of China's information and communication industry.

It should be noted that this latest round of restrictions is the third strike by the U.S. government on China's semiconductor industry in the past three years and also the last major action by the Biden administration before officially leaving office. Regarding the motivation behind these new measures, U.S. Commerce Secretary Gina Raimondo bluntly stated that the new export controls are the culmination of the Biden-Harris Administration's targeted approach to impair the PRC's ability to indigenize the production of advanced technologies, and to prevent China from advancing its domestic semiconductor manufacturing system.

As a result, besides responses from four Chinese industry associations, Chinese Foreign Ministry spokesman Lin Jian pointed out that such behavior by the U.S. undermines the international economic trade order, disrupts global supply chains, and urges the U.S. to respect market economy principles and fair competition. Otherwise, China will also take necessary measures to resolutely safeguard its own security and development interests.

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