Xi Jinping Speaks Before the Chinese Congress
A recent wave of U.S sanctions has destroyed China's semiconductor supply in one night. The new sanctions, aimed at weakening Chinese control, was sent in response to the news that China was using supercomputers, and semiconductors to create weapons of mass destruction and commit human rights abuse. These news restrictions, are some of the toughest ever enacted, aimed at stopping China from producing advanced chips. Multiple U.S. companies have halted exports into China in order to freeze its technological progress. One provider, Applied Materials, estimates the new sanctions will prevent them from making roughly $400 million dollars in the fourth quarter. Some experts do believe however, that these restrictions could have some affects on the United States. Professor Willy Shih of Harvard Business School, says that stopping China from accessing these high end chips could force them into pumping out low end chips and driving down the price. Ultimately, driving up competition for western companies.Another part of the restrictions is that the government has forced many companies into suspending trade with China. The U.S. government has barred any "U.S. persons," which includes green card holders or any Americans from supporting Chinese production or development of advanced chips. This is unless they were to receive an American license.
The large part behind this wave of sanctions was that China was using a large number of semiconductors to develop stealth and hypersonic weapons. They were also decrypting U.S. messages, putting American security into jeopardy. Other countries were more hesitant to end commerce with China, as China is one of the most important technological markets. While these sanctions indeed do not stop foreign manufactures from selling semiconductors to China, not having U.S. chips will severely impede China's ability to produce advanced technology.
https://www.nytimes.com/2022/10/13/us/politics/biden-china-technology-semiconductors.html
https://www.independent.co.uk/news/world/americas/us-sanctions-china-semiconductors-industry-b2202941.html
https://www.washingtonpost.com/technology/2022/10/17/export-controls-us-china-chips/
2 comments:
Despite America cutting China off, I don't know if this will do much in the long term. Recently China just held its legislative assembly in which it outlined its 14th 5-year plan for the country. A part of this plan is achieving technological self-sufficiency and increased research and development in fields like semiconductors, cloud computing, and AI Quantum Computing. At the same time, the Chinese economy is still trying to recover from its strict covid regulations as they missed their predicted growth for the year. It's impossible to say now if their efforts will bear fruit, but China is trying to improve its domestic markets and rely less on the United States for the future. If they continue to grow tensions will most likely escalate into conflicts such as in Kong Kong and Taiwan which China still desires to control.
The U.S. has imposed sanctions on China ever since roughly 2020, but it didn't necessarily affect China as much as the U.S would've liked. Like Christien said, one of China's main goals for the next 5 years is to reach self-sufficiency, which makes me doubt the effectiveness of this sanction. Some professionals also have brought up that China restricting its borders could affect the international and national economies. I wonder what other countries, for example, the U.K. and Russia, would do as the two superpowers become tenser with each other than ever.
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