China says ready to take US head on over Biden administration's proposed curbs on chip exports

On Thursday (November 27), China cautioned that it would take “necessary actions” to protect its companies if the United States escalated restrictions on chip exports.

The warning came amid reports the Biden administration could introduce new measures as early as this week.

The US Chamber of Commerce informed members last week that the administration is considering adding up to 200 Chinese semiconductor firms to a trade blacklist, which would block most US suppliers from shipping goods to them.

Asked about the reports at a regular news conference, Commerce Ministry spokesperson He Yadong criticised the US for what he described as the “abuse” of national security measures targeting Chinese companies.

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“These actions severely disrupt the international economic and trade order, destabilise global industrial security, and harm the cooperative efforts between China and the US, as well as the global semiconductor industry,” He said, adding that if Washington insists on escalating control measures, “China will take necessary actions to resolutely protect the legitimate rights of Chinese enterprises.”

Why is China concerned?

The US has been tightening controls on semiconductor technology exports amid concerns Beijing could use advanced chips to bolster its military capabilities.

Bloomberg reported Thursday that the new US measures could include restrictions on semiconductor equipment and AI memory chip sales to China.

The proposal reportedly focuses on more than 100 Chinese companies involved in semiconductor manufacturing equipment and targets two chip factories owned by Semiconductor Manufacturing International Corp., a Huawei partner.

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However, it notably excludes ChangXin Memory Technologies, which is working to develop AI memory chips.

Tariff tensions still lurking

Adding to trade tensions, President-elect Donald Trump has pledged to implement a 10 per cent tariff on all Chinese imports, accusing Beijing of failing to curb illicit drug trafficking into the US from Mexico.

China’s Commerce Ministry responded Thursday, saying the tariffs would not address America’s internal challenges.

Trump’s comments have raised fears of a renewed trade war as Biden prepares to leave office in January.

With inputs from agencies