China’s Calculated Response to US Semiconductor Crackdown
Amidst escalating tensions with the United States, China has signaled its readiness to counter new export controls targeting its semiconductor industry, but emphasizes a strategic, long-term approach rather than immediate retaliation. This measured response comes as the US intensifies its efforts to curb China’s technological advancement.
tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics, told China Daily, ”The more Washington escalates its measures against China, the less effective these measures prove to be, and the more they reveal their underlying fears. The U.S. has long hoped to curb China’s technological rise at minimal cost, only to discover that stringent controls ultimately fail to deliver the intended results.”
the US recently initiated a Section 301 inquiry into China’s semiconductor sector and expanded export restrictions to approximately 140 Chinese companies, limiting their access to crucial US semiconductor manufacturing equipment and advanced chip technology. These actions, according to Tu, reflect “Washington’s fear of growing competitiveness in homegrown chip technologies,” pointing to the progress made by companies like Huawei and SMIC despite existing US barriers.
While acknowledging China’s preparedness to “take necessary countermeasures to safeguard its own safety and interests,” including potential export controls on vital resources like rare earth minerals, Tu stressed that the response is not about tit-for-tat retaliation.he stated, “China takes a long-term, strategic view of its technological competition with the U.S. The ultimate objective is not retaliation,but advancing development and achieving higher-quality economic growth.”
Tu further emphasized the importance of openness and collaboration, stating, “While the U.S.tries to isolate and contain China, we should redouble efforts to expand trade, deepen economic ties — including with the U.S. — and counter decoupling attempts.” He believes this approach will strengthen China’s position in its strategic interactions with the US and advocates for broader engagement with other nations through trade, technology cooperation, and investment.
The ongoing rivalry between the world’s two largest economies, according to Tu, is fundamentally a competition focused on development. This outlook underscores China’s commitment to its own technological progress while together advocating for a more collaborative global economic landscape.
China’s Economic Ties: A Balancing Act Between Global Integration and US Tensions
The intricate dance between China’s economic growth and its relationship with the global community is under increasing scrutiny,particularly in light of recent US policy decisions. Experts are weighing the benefits of china’s expanding market against the challenges posed by geopolitical tensions.
one prominent economist,whose name has been omitted for privacy reasons, argues that “Strengthening economic ties will bind China more closely with the global economy,creating a network of shared interests.” this perspective highlights the potential for mutual benefit through increased trade and collaboration.
The same economist further emphasizes the unique dynamics of the Chinese market. “From a global market perspective, this is beneficial, as it increases supply, diversifies offerings and enables consumers to access better and more affordable products. To some extent, China’s contributions have also helped keep global inflation low in recent years,” he notes, pointing to the positive impact on global consumers.
Though, the path to greater integration isn’t without its obstacles. The economist urges the Chinese government to address concerns about market access restrictions and operational hurdles faced by foreign businesses. “Removing these barriers will enhance the business environment for foreign enterprises in China, reinforcing the country’s commitment to openness and long-term growth on a global scale,” he stated, underscoring the importance of a level playing field.
Adding another layer of complexity are recent US actions targeting China’s semiconductor industry. This move has prompted a unified response from four major Chinese industry associations representing semiconductors, automotive, internet, and telecommunications sectors – a rare show of solidarity.
The China Semiconductor Industry Association declared that the US actions have rendered US chip products “no longer secure and reliable,” prompting increased caution among Chinese companies.This highlights the potential for a fracturing of global supply chains.
Fu Qiang, an analyst from Ping An Securities, provides a stark assessment of the situation. “U.S. moves will only fragment global supply chains and hinder healthy industry development,” Fu said. “Also, as China is a critical market for semiconductor products and equipment, many U.S. firms have significant involvement in China, and U.S. restrictions will only limit their own growth opportunities.” This perspective underscores the potential for self-inflicted economic harm through protectionist measures.
The ongoing tension between the US and China over economic dominance has far-reaching implications for global markets and the stability of international trade. The coming months will be crucial in determining whether cooperation or confrontation will prevail.
