China hawks in the United States Congress are reportedly urging the Joe Biden administration to restrict sales of chipmaking tools to Chinese companies. In a letter to US Commerce Secretary Gina Raimondo that reeks of a McCarthyist mindset, Representative Michael McCaul and Senator Tom Cotton said the rule that requires US licenses to sell semiconductors made abroad with US technology to Huawei should apply to any Chinese company designing more advanced chips at 14-nanometers or below. The letter, made public last week, also seeks licenses for the sale of electronic design automation software, among other curbs on chip-related sales to Chinese companies.
The move signals how desperately some in the US are seeking to cut off all Chinese companies from the global semiconductor supply chain, even though SMIC, one of China’s most sophisticated chipmakers, mainly produces 14-nanometer wafers, while 5-nanometer is the most cutting-edge chip technology now.
The letter resonates with the Strategic Competition Act that the Senate Foreign Relations Committee released early this month, which seeks to make sure that the US is well positioned to confront China across all dimensions of national and international power for decades to come. The draft bill already calls for the US to counter China and lead in key technologies including artificial intelligence, 5G telecommunications and semiconductor manufacturing.
As it stands, this augurs ill for China’s tech companies. The fact that Huawei saw a sharp slide in its smartphone sales globally — by more than 40 percent — in the fourth quarter of last year, mainly due to a lack of high-end chips, reflects the daunting challenges that many Chinese high-tech companies may face ahead.
Which underscores the urgency for China to wean itself off its reliance on US equipment and technologies, so that the country will not be so easily held to ransom by the US’ bullying tactics in the high-tech sector.
The country has set an ambitious goal for its high-tech sector and plans to produce more than 70 percent of the chips it uses by 2025. And last year Chinese chipmakers raised more than twice the amount of money they raised in 2019, indicating more efforts are being made to realize the self-reliance target.
History proves that high-tech sanctions will in no way halt China’s ascent. Rather the sense of humiliation they bring about will only make the Chinese people more determined to rely on their own wisdom and creativity to make a better future for themselves. The US will end up finding that not only have its bullying tactics been to no avail, but it has lost the huge Chinese market.