China Hits Back, Calls for Boycott of US Semiconductors
China’s efforts to bolster its domestic semiconductor industry appear to be entering a new phase. After the US announced further restrictions on the export of advanced chips to China, four major industry groups issued a stark warning: Chinese companies should reduce their reliance on American semiconductors, citing "safety concerns."
Beyond simply urging caution, some experts argue the motive behind the move is not just safety, but a strategic shift. A prominent columnist using the pseudonym “Jindou”, on China’s leading internet portal, noted a public statement from the Ministry of Industry and Information Technology (MIIT) earlier this year stating that chips produced in the United States will be phased out of China’s telecommunication networks by 2027.
This assertive stance is bolstered by significant investments China has made in its domestic semiconductor industry since 2018. Recent reports highlight promising growth in China’s chip exports, which surged 19.6% year-on-year to 246 billion units in the first 10 months of this year, while chip imports only increased by 15% to 456 billion units.
The shift is not unexpected. Beijing has been working aggressively to reduce its reliance on foreign technology, particularly from America. “The US forbids Chinese firms from buying its high-end chips,” writes another defined Beijing based columnist, “It’s fair that Chinese companies reduce their purchases of American legacy chips,” the columnist, Wang Feiyun, continued. He further emphasizes a tit-for-tat strategy: "We do not only stop buying US chips, but also stop the US from obtaining China’s raw materials," referring to recent decisions to ban the export of crucial metals used in semiconductor production.
China is leaving no stone unturned. On top of calls to boycott US chips, China has implemented stricter export controls on specific materials vital to the United States semiconductor industry.
The U.S. response was swift and predictable.
In December, the US announced its third round of export controls against China, further limiting access to high-tech equipment, software and high-bandwidth memory chips, citing concerns over China’s ability to produce advanced technologies that threaten US national security.
This latest round follows two previous rounds in 2021 and 2022. According to reports, the US has added 140 companies to a restricted list, effectively halting their access to American technology and signifying a deepening technological cold war.
However, China is not backing down. Experts predict that this escalating trade war will ultimately cut off US chip makers, such as Intel and Qualcomm, from the lucrative Chinese market. The race for technological dominance is on, and both sides are playing for keeps.
The world observes with baited breath.
Is China’s push to reduce reliance on US semiconductors a purely strategic move or a reaction to US pressure?
## China’s Chip War: A Calculated Move or a Forced Hand?
**Host:** Joining us today is Dr. Lin Wei, a leading expert on Chinese technology and economic policy. Dr. Wei, thanks for being here.
**Dr. Wei:** My pleasure.
**Host:** We’ve seen recent reports from Chinese industry groups urging a reduction in reliance on US semiconductors, citing safety concerns. Many experts believe this is more than just caution, but a strategic shift. What’s your take?
**Dr. Wei:** I agree, it’s more than just safety concerns. This is a direct response to the tightening US chip restrictions, aimed at crippling China’s technological advancements. The call for phasing out US chips from telecommunication networks by 2027, as highlighted by columnist Jindou, reinforces this strategic redirection [[1](https://www.nytimes.com/2023/05/11/technology/china-us-chip-controls.html)].
**Host:** Is this a viable strategy for China? Can they really decouple from US chip technology?
**Dr. Wei:** China is indeed making impressive strides in its domestic semiconductor sector, with significant investments since 2018. The growth in chip exports this year is encouraging [[1](https://www.nytimes.com/2023/05/11/technology/china-us-chip-controls.html)].
However, replacing US chips entirely will be a Herculean task. They still lag behind in key technologies, particularly advanced chips crucial for cutting-edge industries like AI.
**Host:** So, is this more of a symbolic move, sending a strong message to the US despite the practical challenges?
**Dr. Wei:** I believe it’s both symbolic and strategic.
China wants to demonstrate its resolve and build leverage in future negotiations.
It also aims to accelerate the development of its domestic industry.
The goal is to reduce dependence on the US and build a more self-reliant technological ecosystem, even if complete decoupling is not immediately feasible.
**Host:** Thank you for shedding light on this complex issue, Dr. Wei. It’ll be fascinating to watch how this chip conflict evolves in the coming years.
**Dr. Wei:** You’re welcome. It’s certainly a development with far-reaching implications for the global tech landscape.
