The administration of the President of the United States Joe Biden is presenting a draft of new export control measures for the supply of critical technologies.
It is known that the expansion of Washington’s restrictive policy in the context of international cooperation in the technology sector is because China is currently demonstrating progress in the area of chip development and production. Also in this case, the factor impacting the actions of the administration of the President of the United States was that the mentioned Beijing’s successes are highly likely to be scaled globally.
It is worth noting that policymakers in Washington, as part of explaining the concept of restrictive policy in the sphere of advanced technology supplies, have repeatedly stated that the appropriate measures are due to national security considerations. In this context, they talked that how Beijing could use chips to strengthen its military capabilities.
On Friday, September 6, the Department of Commerce of the United States announced a new export control rules draft. Changes have been made to the already existing supply restriction policy, which provides for a ban on the sale of advanced chips and equipment for the production of microcircuits of the corresponding category to China. The new export control rules apply to quantum computers and components. Washington has also expanded the list of advanced chip manufacturing tools, with restrictions on the supply of which. Moreover, the new export control rules apply to certain components and software related to metals and metal alloys. Besides, the restrictive measures unveiled on Friday affected high-bandwidth chips, which are critically necessary for the functioning of artificial intelligence apps.
The Department of Commerce of the United States stated that the expansion of export control policy is related to ensuring national security. This formulation, as already mentioned, is always used by Washington as an argument in favor of restrictive practices that apply to supplies in the global technology sector. The US Department of Commerce also stated that the expansion of export control measures is due to the country’s foreign policy strategy. Moreover, it was separately noted that the new rules for the supply of critical technologies were formed after extensive discussions on the relevant issue with Washington’s international partners.
It is worth noting that the export control measures announced on Friday are global in nature. This means that the mentioned restrictive practice applies to shipments worldwide. At the same time, there are exceptions in this case, which relate to countries that roll out similar export control measures. The Netherlands and Japan are already involved in this practice.
The department’s Bureau of Industry and Security (BIS) expects that the number of countries that have implemented export restriction policies will increase. Alan Estevez, under secretary of the bureau, stated that today’s actions indicate that the US national supply monitoring system is in line with rapidly developing technologies and is becoming more effective as part of Washington’s cooperation with international partners. He also noted separately that the coordination of export control measures for quantum and other advanced technologies makes it much more difficult for the opponents of the United States to develop and implement appropriate solutions in such a way that a threat to collective security is formed.
It is known that officials will hold a 60-day public comment period before making a final decision.
It is worth noting that the semiconductor industry is currently a kind of battleground between Beijing and Washington. Nowadays, chips are what can be called a basic component of the modern technology industry. Microcircuits are used in many devices and equipment. For example, chips have already become a common component in the automotive industry. Microcircuits are also necessary for training and ensuring the process of subsequent functioning of artificial intelligence systems. Against this background, it is natural that the area of chip development and production becomes what can be called one of the main points of conflict of interest in the context of geopolitical tensions. The level of development of the semiconductor industry is most likely to determine the economic potential of countries and their position in the international political space in the foreseeable future.
At the same time, the chip development and manufacturing area is not the only plane of rivalry between Washington and Beijing. Currently, China and the United States are also fighting for leadership in the sphere of quantum computing. Both countries see this technology as potentially transformative.
It is worth noting that there is no direct mention of China in the official documentation of the United States. At the same time, the expansion of export control measures is fully consistent with the logic of Washington’s previous decisions aimed at limiting Beijing’s ability to move forward in product development in such segments of the technology sector as artificial intelligence and computing technology.
Against the background of restrictive decisions by the United States, China is currently stepping up efforts to achieve technological sovereignty. Beijing has invested billions of dollars in the chip manufacturing area. It is worth noting that at present, technological sovereignty in a certain sense is what can be called a vital necessity. Against the background of geopolitical tensions, the country’s ability to provide itself with advanced technologies, including in terms of the potential of autonomous production, is of critical importance. The importance of technological sovereignty was also witnessed by the experience of the coronavirus pandemic when significant disruptions in the international supply chain were recorded due to the introduction of restrictive measures because of the difficult sanitary and epidemiological situation. It is worth noting that in the context of globalization, a large-scale system of trade and production activities has been formed, in which many countries are involved. Within the framework of this system, a failure in one of the geographical areas can disrupt the entire process.
The analysis of semiconductor technologies in China, which was conducted by the Japanese research company TechanaLye, indicates that locally produced processor chips are approaching a kind of technological lag level, which is only three years from the industry leader Taiwan Semiconductor Manufacturing Co Ltd. The relevant information was published by the Asian media.
It is also worth noting that the global semiconductor industry is showing a negative reaction to the scaling up of export controls by Washington. In this context, it is important that China is one of the world’s largest markets. The termination of interaction with this commercial space means the loss of a significant part of earnings for companies. Chinese customers are also among the main clients of technology firms. Some US companies, against the background of Washington’s restrictive practices, began to develop products specifically for the mentioned Asian country market to continue to interact with local customers and at the same time not violate the export control regime. For example, last year it was announced that Nvidia is developing a special version of its gaming chip for China.
This week, Christophe Fouquet, chief executive officer of ASML, a Dutch company that manufactures microcircuit-making equipment, said that Washington’s restrictive measures have become more economically motivated over time. In this context, the head of the firm also stated that he expected more push-back action. It is worth noting that ASML cannot supply its products in China due to export controls.
The Dutch government has promised to take into account the economic interests of ASML when making decisions on further tightening of semiconductor supply rules.
Media also reported that South Korean Trade Minister Cheong Inkyo said this week that the United States should offer more incentives if Washington wants Seoul to comply with additional restrictions on semiconductor export to China.
Beijing, commenting on export controls, claims that these measures contradict the principles of fair competition. The Chinese authorities also said that restrictive policy damages the global semiconductor supply chain.
