China is always in the news but for appalling reasons. While Covid19 has pushed China to the brink, alienating itself from the globe, the latest move by the Biden administration to blacklist Chinese memory chipmaker YMTC and 21 “major” Chinese players in the artificial intelligence chip industry, broadening its crackdown on China’s chip industry, has further ostracized Beijing. The move has imposed sweeping export/import controls over China.
YMTC, long in the surveillance of the US government, will be added to the list over apprehensions it could siphon US technology to earlier blacklisted Chinese tech giants Huawei and Hikvision. The move will debar YMTC’s suppliers from shipping US goods to it without a difficult-to-obtain licence. Besides, 21 Chinese AI chip entities have been blacklisted for their suspicious actions, which include Cambricon and CETC, and are expected to face an even tougher penalty, with the US government effectively blocking their access to technology made anywhere in the world with US equipment.
As the Chinese government seeks to remove barriers between its military and civilian sectors, it may risk the national security interests of the United States and requires acting decisively to deny access to advanced technologies. The Assistant Secretary of Commerce for Export Administration Thea Kendler expressed apprehension about the pilferage of sophisticated American technologies.
The authorities of YMTC, Cambricon, CETC and the Chinese Embassy in Washington did not immediately respond.
Sweeping Controls imposed on Chinese companies
The move puts on sweeping export controls imposed on Beijing in October to restrain Beijing’s technological and military advances, including measures to curb China’s access to US chip-making paraphernalia and cut it off from certain chips made anywhere in the world with US equipment. Meanwhile, the US Congress has declared to bring legislation to bar the US government from buying products that contain semiconductors made by YMTC, Chinese memory chipmaker CXMT or China’s top chip manufacturer SMIC.
Besides, nine Chinese entities are under attack by the US Commerce Department for allegedly supporting China’s military modernisation, including Shanghai Micro Electronics Equipment Group Co Ltd (SMEE), China’s only lithography company. A total of 35 Chinese entities were added to the trade blacklist, known as the entity list.
The US administration has removed Wuxi Biologics, a company that makes ingredients for AstraZeneca’s Covid-19 vaccine apart from 25 other Chinese entities from the so-called unverified list.
Notably, companies are added to the unverified list if the United States authorities cannot complete on-site visits to determine if they can be trusted to receive sensitive US technology exports – similar inspections in China require approval from the commerce ministry. Once added to the unverified list implies US suppliers perform greater due diligence before shipping to the listed companies.
The US Commerce Department officials have asked for greater cooperation from Beijing in site checks to a new rule announced in October. Under that rule, if a government prevents US officials from conducting site checks at companies on the unverified list, Washington may add them to the entity list after sixty days. It is noteworthy to mention that under the new policy, the Commerce Department on Thursday removed nine Russian entities from the unverified list and added them to the entity list because the US has been unable to conduct site visits.
Top Senate Democrat Chuck Schumer welcomed the imposition of new penalties on YMTC as he claimed that the Chinese company poses an immediate threat to US national security, so the Biden administration needed to act swiftly to prevent YMTC from gaining even an inch of a military or economic advantage.
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Chip War is an epic account of the decades-long battle to control what has emerged as the world’s most critical resource—microchip technology—with the United States and China increasingly in conflict.
Many would be surprised to learn that microchips are the new oil—the scarce resource on which the modern world depends. Today, military, economic, and geopolitical power are built on a foundation of computer chips. Virtually everything—from missiles to microwaves, smartphones to the stock market, runs on semiconductors. Now, as Chip War reveals, China, which spends more money importing chips than any other product, is pouring billions into a chip-building initiative to catch the US’s lead. At stake is not only America’s economic prosperity but also its military superiority.
The Chip War is going to continue with a renewed vengeance and hog the limelight in the years to come. The growth and development of the world revolve around chip technology and its prowess to conquer all spectres of life. At the moment the US and China are entangled in this battle of supremacy, although Washington is more apprehensive about China’s espionage and pilferage of its advanced chip technology, the world may sooner see more players in this field making the conflict more interesting and gruelling.
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