China and the United States are already at wareven if not armed. The conflict between two of the top powers in the field of technology has become more palpable than ever following Washington’s restrictions on chip exports. The balance so far maintained by the nations together with Taiwan (a real leader in the production of semiconductors) is decidedly at risk, also thanks to China’s positions towards Taiwan and the support of the United States for the latter.
What China and the US are fighting over and why
Washington has officially begun the increase in controls announced by President Biden at the end of 2022, blocking the semiconductor sales made with US technologies to China. In parallel, even US citizens will not be able to work with Chinese products, unless with a specific authorization. That’s not all, the growing restrictions engineered by the US government should lead to a blocking of US companies’ investments in artificial intelligence, 5g e quantum computing made in China.
Precisely in view of this further restriction, Washington has already signed an agreement in February with Japan e When to limit its exports of advanced microchips to China. A heavy blow for the Dragon, which acquired from the United States and Japan around 60% of manufacturing equipment for microchips. Considering that this sector is decidedly important in the Chinese economy and in its technological advance, one already wonders about the consequences of this decision, undoubtedly indigestible to China.
Will the war on microchips help stop the Chinese advance?
Washington’s decisions are undoubtedly highly detrimental to the technology market, but probably nothing that China cannot solve briefly with its own resources. In short, it seems that this US economic-political move will have the greatest impact for China in starting a conflict, as well as some short-term discomfort.
Who Losenior marketing specialist Apac of Bnp paribas asset management explained that the restrictions implemented by the United States have the capacity to harm China only in the short term, while it may even be strengthened later on. In fact, it must be considered that China is heavily involved in the semiconductor chain, depending for the most part on US exports. A certain negative impact on the Chinese system is therefore inevitable, which it risks having to set back technological development of advanced microchips due to lack of manufacturing systems, thus resulting in a major trade deficit.
On the other hand, it is equally probable that Chinese software industries will not be harmed and could continue the same pace of technological development until it becomes the major distributor in the internal market, certainly not small. In addition to the immediate impact that will force China to readjust its technological development systems, the Dragon has all the foundations to readjust its strategies without losing even an inch of the road gained in this field.
In fact, we must not forget that the country can count on a well-diversified technological marketing, very vast above all on the production of low-end technological products, in which it represents a real excellence on the market. Moreover, the technological systems used within the Chinese territory rely on less sophisticated but indigenously produced microchips. A forward-looking strategy to avoid any form of dependence on the United States that will now bear fruit.
However, the Dragon does not lack the technical capabilities to compensate for the import block with the autonomous production. Even if for the moment the commercial capacity does not seem sufficient for this purpose, in fact, the vast investments in research should be able to help the Chinese market to circumvent the problem in a short time.
The US also hits its own businesses with restrictions
While the effects of the restrictions are most evident in the Chinese market, US firms will also experience a significant slowdown. A huge slice of the market will be cut off, with a consequent sales slump and earnings. Another step in a kind of technological cold war that draws disadvantages for all, even if both nations remain steadfast on the cornerstones. The security policies at the origin of the conflict are undisputed for Washington and unacceptable for Beijing.
2023-05-16 19:46:00
#China #United #States #war #armed #heres #theyre #fighting
