Biden-Xi Jinping Meeting Signals New Era in U.S. Export Controls on Computer Chips – National

The Biden administration’s move to block the export of advanced computer chips to China signals a new phase in relations between the world’s two largest economies. In his two economic powerhouses, trade is more important than an increasingly heated race for world-leading technological and military power.

The positive move, announced last month, will help set the tone for President Joe Biden and Chinese President Xi Jinping as they meet on the sidelines of the G20 summit in Asia on Monday. This is evidence of Biden’s determination to “manage” US competition from China, which officials were quick to denounce the export ban.

After more than two decades of focus on expanding trade and growing the global economy, the two countries openly prioritize their national interests as the global economy suffers from high inflation and the risk of recession. The United States and China each recognize the development and production of computer chips as essential to their economic growth and their national security interests.

Commerce Secretary Gina Raimond said in an interview that she would “do whatever it takes to protect the American people from the Chinese threat.” “China is very clear. They use this technology for surveillance. They use this technology for cyberattacks. It will harm our ability to protect ourselves.”

Xi responded to the export ban in a statement at the Chinese Communist Party Congress last month, securing a third term as the country’s leader. He promised that China would move more aggressively to become self-reliant in the production of semiconductors and other technologies.

“We will act more quickly to launch many major national projects of strategic, big-picture and long-term importance to enhance China’s innovation capacity,” Xi said.

The Chinese government has made developing advanced computer chips capable of handling everything from artificial intelligence to hypersonic missiles one of its top priorities. To fill the gap to get there, China has relied on imports of advanced chips and manufacturing equipment from the United States — experts with American ties.

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The US and its allies famously rolled out export controls against Russia after invading Ukraine in February. This made it difficult for the Russian army to resupply weapons, ammunition, tanks and aircraft. As a result of these constraints, Russia has relied on drones from Iran, and the US has accused North Korea of ​​supplying artillery.

Until recently, the United States operated on the premise that strong trade ties bring countries closer together in a way that makes the world safer and more prosperous: the post-Cold War order. Global Supply Her chain was thought to cut costs, boost profits, and instill democratic values ​​into realms of oligarchy, dictatorship and dictatorship.

But after a global pandemic, war in Ukraine and China’s own ambitions, the Biden administration and many European and Asian allies have chosen to prioritize national security and industrial strategy. both offer tens of billions of dollars in incentives to boost domestic production of computer chips.

In a speech at IBM last month, Mr. Biden said China had lobbied specifically against a law that would provide $52 billion to produce and develop advanced semiconductors in the U.S. Computers in the U.S. About the construction of a chip factory.

He said some Republican lawmakers who opposed the measure accepted China’s arguments.

“The Chinese Communist Party was lobbying in the U.S. Congress against passing this bill,” Biden said. “And unfortunately, some of my friends on other teams bought it.”

During his presidency, Donald Trump used fierce rhetoric against China, imposing tariffs that the Biden administration has yet to lift. But on a qualitative scale, the computer chip ban is far tougher than anything Trump has imposed, says Gregory Allen, a senior fellow in the Strategic Technology Program at the Center for Strategic and International Studies. Stated.

Mr. Allen said the Trump-era tariffs were big in dollar terms, but had little impact on the trade balance. Import taxes were also not strategic.Export controls imposed by the Biden administration would be a setback for China’s technology, which is already decades behind the U.S.

“We’re basically all about saying China won’t hit the number one goal,” Allen said.

Christopher Miller, a professor at Tufts University, said the era of relatively free access to U.S. and European markets for competitors such as China and Russia is coming to an end.

“As the risks posed by these countries have increased, Western leaders have reconsidered the prudence of giving adversaries open access to their markets,” Miller said. .

Instead of trying to work together as a single global economy, new alliances such as the Quad (Australia, India, Japan and the United States) are being formed and existing partnerships such as NATO are being expanded. Economic integration between these partners has become essential as US export restrictions on advanced chips require support from other producers in Japan and the Netherlands.

“All major powers are restructuring international economic relations in ways they hope will improve their geopolitical standing,” Miller said. “Semiconductor is just one of many areas where great power competition is repoliticizing trade, technology and capital flows.”

© 2022 The Associated Press