WASHINGTON, DC, October 31, 2022—By imposing sweeping restrictions on semiconductor exports to Beijing, Washington has brought the hammer down on Chinese leader Xi Jinping’s ambition to transform his country into a technological powerhouse.
The unprecedented controls, intended to prevent China from getting and producing leading-edge chips, may have far-reaching implications as Washington seeks to slow Beijing’s technological and military rise and weighs imposing even more onerous restrictions.
Referred to by some as one of the most consequential U.S. policy decisions since the end of the Cold War, the latest round of U.S. semiconductor export restrictions on China is by far the most punitive yet.
Announced in early October by the U.S. Department of Commerce, the new measures require vendors to obtain an export license to sell to China cutting-edge semiconductors, components, chip-design software and manufacturing equipment made with U.S. technology.
They also bar U.S. citizens and entities from working with Chinese chipmakers without explicit approval. The new controls are also extraterritorial, meaning they extend to items produced outside the U.S. but using American inputs, including design, a mechanism meant to compel foreign firms to abide by American export control policy.
Citing U.S. national security and foreign policy interests, the Department of Commerce said the new rules are meant to restrict Beijing’s ability to “both purchase and manufacture certain high-end chips used in military applications.”
U.S. officials have justified the move by saying these items and capabilities are being used by China to produce advanced military systems, enhance its defense capabilities and commit human rights abuses.
Emily Benson, an international trade expert at the Washington-based Center for Strategic and International Studies, said the decision is a direct reaction to China’s civil-military fusion policy, which promotes dual-use technology, as Washington casts doubt on the ability to separate between Chinese civil and military end-users.
It is important to note that, although far-reaching, the new rules do not amount to a total chip embargo, as Beijing may continue importing less-advanced semiconductors for use in items such as TVs or cars that do not have applications in supercomputing or advanced artificial intelligence capabilities.
Given that high-end semiconductors are also used in civilian applications, the recently imposed controls are expected to affect sectors of the Chinese economy with no direct ties to the country’s military.
This has prompted experts to say that the broader aim of the administration of U.S. President Joe Biden is to curb China’s development and deployment of applications requiring AI or high-performance computing while ensuring U.S. and Western leadership in this vital sector.
“Washington has signaled that keeping a strategic competitor a generation or two behind in terms of technological capabilities is no longer a viable strategy and that it must shift from a policy of ‘delaying’ to one of ‘degrading’ a competitor’s capabilities,” Benson said. “We are currently experiencing that shift.”
Gregory Allen, director of the AI Governance Project at CSIS, said Washington is “firmly focused” on retaining control over “chokepoint technologies” in the global semiconductor supply chain, including AI chip designs and electronic design automation software.
How New Rule Impact USA
China is far along than any Nation in its AI industry. Washington does not have the high-tech to compete with China.
“Stanford University recently placed China in the top two countries worldwide for “AI vibrancy,” noting that it has produced one-third of global academic papers and citations on the subject, as well as raising one-fifth of global private capital for developing it. McKinsey predicts that AI could add some $600 billion to China’s economy by 2030, with $335 billion of that figure coming from autonomous driving alone,” wrote the Diplomat.
Source: Bee News Daily, The Diplomat and the Japan Times contributed to the article.