Analyzing ‌US export restrictions on more than 100 Chinese companies

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Analyzing ‌US export restrictions on more than 100 Chinese companies
Kredit: nytimes.com

The Biden administration has started to impose new restrictions on China’s exports. They announced new rules to prevent advanced technology from going to China. According to these rules, it is important to prevent the sale of specific chips and machinery. It is expected that China could use this advanced technology for military and AI purposes. In this restricted trade list, more than 100 Chinese companies were added. For the past 3 years, this is the 3rd progressive stop to stop the technological progress of China. 

According to Commerce Secretary Gina Raimondo, these steps are being taken to save national security. After having deep discussions with industry leaders, allies, and experts, the government decided to put this ban on China. Some national security groups have lobbied for tougher rules. At the same time, some have said that these restrictions will not prove successful for ‌United States companies. 

To balance ‌growing concerns about threats from China, these new rules were imposed. They have only aimed to prevent China from making advanced chips that harm America’s security. The US never wants China to gain an edge in military and artificial technology. According to the Biden administration, this is the only way to secure a US security position. 

This new trade restriction to prevent Chinese technology from growing has a large impact on semiconductor industries. Approximately 140 Chinese companies have to face ‌severe challenges due to this new trade rule. They are not allowed to continue the process of chip production. Due to these rules, various memory chip shipments to China have been banned. The rule also imposes worldwide restrictions on equipment used to manufacture chips, effective December 31. Furthermore, US companies strictly investigate that everyone must follow the rules. 

Many experts say that industry lobbying may influence the regulations and try to break the rules. Many critics say that these new rules not only target Chinese companies but also harm US businesses. 

Despite these strict restrictions, different semiconductor companies used their stocks of goods and increased prices. This includes Applied Materials, KLA, and Lam Research.

Global trade and US limitations clash in the discussion of semiconductor equipment. To fill the void left by American businesses, companies such as Tokyo Electron from Japan and ASML from the Netherlands have boosted their equipment supplies to China. No formal statement has been made, despite the efforts of US officials to persuade Japan and the Netherlands to enact similar regulations. Proponents argue that international cooperation strengthens the regulations, while detractors claim the delay allowed China to purchase billions of dollars worth of equipment.

By prohibiting foreign corporations from transferring equipment to China that leverages US technology, the new US regulations give the country more authority. However, the Netherlands and Japan are free to set their own regulations.

Additionally, these new regulations aim to prevent American businesses from evading prohibitions by utilizing factories abroad. When Japan and the Netherlands implement their own regulations the impact on China’s semiconductor industry is yet unknown.

Although the authority in question is strong, Mr. Allen noted that there are a lot of exceptions. The application of the authority is more nuanced than it first seems because of these exclusions, which permit the shipment of commodities to China.

It’s still unclear how China will react to US export restrictions. China has recently tightened its export regulations, particularly for delicate goods like rare earth minerals. To penalize businesses that undermine China’s interests, it has also developed a list. 

Lin Jian, the spokesperson for China’s Foreign Ministry, underlined that China will defend the rights of its businesses and is against the misuse of export controls.

According to experts, China is likely to target American IT businesses, as seen by the inquiry into Micron last year after the United States placed a Chinese chip manufacturer on its blacklist.

Global businesses, many of which still depend on China because of its sizable industrial base and consumer market, are facing difficulties as a result of the widening gap between American and Chinese tech supply chains. But it’s getting more difficult to overlook the competition between the two countries.

Research Staff

Research Staff

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