In Its Tech War With America, China Brings Out The Big Guns

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China and the United States are locked in a fierce technological battle, with the US intensifying its efforts in recent times. President Joe Biden’s administration has implemented stringent restrictions on Chinese AI firms’ access to American technology, while also urging its allies to adopt similar measures.

Under pressure from the White House, the Netherlands has imposed restrictions on the sale of chipmaking kits to China. ASML, the Dutch manufacturer of advanced lithography machines, will now only sell low-yield machines to Chinese customers. Additionally, the US government is preparing to crack down on Chinese use of US cloud-computing services, preventing Chinese AI firms from leveraging high-end processors without their own chips.

In response, China has unleashed a significant retaliatory move. After initially prohibiting certain Chinese companies from using Micron’s memory chips, China has announced export controls on gallium and germanium, two metals crucial for high-end semiconductors.

These export controls will take effect on August 1 and could have a global impact on the chip industry. China currently supplies approximately 80% of the world’s gallium and germanium, with the United States relying on China for up to 50% of its germanium supply. The ban on chip metal sales could disrupt the production of chips, fiber-optic gear, solar panels, and screens, and hinder the development of next-generation technologies. The shift from silicon to gallium nitride or silicon carbide, anticipated by chip manufacturers, may also face obstacles. Furthermore, gallium and germanium have potential applications in electric vehicles, nuclear power, and weaponry.

China’s strategic move comes at a critical juncture in Sino-US relations. While both sides have engaged in technological maneuvers, efforts to stabilize ties have also been made. Talks between Chinese and US commerce secretaries and US Secretary of State Antony Blinken’s recent visit to China signal a potential for constructive dialogue.

However, it is crucial for President Biden and his administration to acknowledge China’s determination. Although some argue that China’s actions may not match its rhetoric, the new export control rules require government approval and export licenses. The Chinese government has the discretion to grant these licenses to prevent harm to Chinese exporters who rely on selling gallium and germanium to American customers.

Nevertheless, China’s resolute stance indicates its unwillingness to back down easily. The tech war between the two countries is likely to continue with significant implications for the global technological landscape.

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