Tough rules will limit China’s access to chips
The Biden Administration has announced its most aggressive measures to date aimed at limiting China’s access to advanced computer chips and chip-making equipment, saying the technology is supporting China’s military modernisation and even its development of weapons of mass destruction.
The Administration said it was focusing solely on the chips, activities and entities of ‘‘greatest national security concern’’ in China to minimise harm to the American chip industry and disruptions to the global supply chain.
The move is a flexing of US muscle in its strategic competition with China, with analysts saying it amounts to a new strategy of high-tech containment.
But officials also acknowledged that the effort could backfire without buy-in from foreign partners and allies.
Among the new measures, the Administration is deploying a draconian trade rule that has global sweep, aimed at stopping chipmakers not just in the US but overseas from supplying advanced chips to China for use in artificial intelligence, supercomputers, and supercomputingrelated activities.
Use of the foreign direct product rule (FDPR) will prevent companies anywhere in the world from selling advanced chips to Chinese firms or organisations engaged in AI and supercomputing activities without a US government licence if the companies use American technology to make the chips, as nearly every semiconductor company globally does.
The Administration is also taking steps to try to slow China’s ability to produce its own highend chips. For now, China still lags behind Taiwan, South Korea and the US.
These controls would essentially bar exports of Americanmade tools needed for high-end chip production in China, and of US tools or components to Chinese factories capable of making chips above or below a certain threshold.
The Commerce Department will also bar American factories, and Americans who work in foreign factories overseas, from providing support without a licence to the development or production of such chips for China.
The technologies fuelled by these chips were used for mass surveillance and to enable human rights abuses, senior Administration officials said.
National security adviser Jake Sullivan last month said the Administration was seeking to shed the old approach of maintaining a ‘‘relative’’ advantage in key technologies to blowing open ‘‘as large of a lead as possible’’.
Export controls imposed on Russia by the United States and 37 other countries earlier this year showed that such tools could do more than just prevent gains, Sullivan said. ‘‘They can be a new strategic asset in the US and allied tool kit to impose costs on adversaries, and even over time degrade their battlefield capabilities.’’
The Chinese embassy in Washington, DC called the move ‘‘sci-tech hegemony’’, accusing the Administration of seeking ‘‘to hobble and suppress the development of emerging markets and developing countries’’.