US tightens chip export controls to China

WASHINGTON

The United States has announced new export controls aimed at restricting China’s ability to buy and manufacture high-end chips with military applications, stepping up tensions between the countries.

The moves complicate Beijing’s push to further its own semiconductor industry and develop advanced military systems, and come days ahead of a major party congress in China at which President Xi Jinping is expected to secure a historic third term.

The rules, announced by the U.S. Department of Commerce, include export restrictions on some chips used in supercomputing, and toughen requirements on the sale of semiconductor equipment.

The aim is to prevent “sensitive technologies with military applications” from being acquired by China’s military, intelligence and security services, said Commerce Department official Alan Estevez in a statement.

The rules were announced just days after the Pentagon added 13 more Chinese firms including drone manufacturer DJI and surveillance firm Zhejiang Dahua Technology to a blacklist of Chinese military-linked companies.

Chinese foreign ministry spokeswoman Mao Ning on Oct. 8 hit back at the chip export restrictions, accusing Washington of attempting to “maliciously block and suppress Chinese businesses”.

The U.S. move “violates international economic and trade rules” and would hurt American businesses along with Chinese ones, Mao warned.

In August, U.S. President Joe Biden signed into law a multibillion dollar bill boosting domestic semiconductor and other high-tech manufacturing sectors that U.S. leaders fear risk being dominated by China.

Tens of billions of dollars more were allocated for scientific research and development.

China has poured resources into developing supercomputing capabilities and seeks to become a world leader in artificial intelligence by 2030, said another Commerce Department official, Thea Kendler.

But the country “is using these capabilities to monitor, track, and surveil their own citizens, and fuel its military modernization,” Kendler said, adding that the latest actions protect U.S. national security.

The U.S. has implemented a raft of measures and restrictions designed to prevent China from obtaining chip technology, while China has earmarked billions for investment into the production of semiconductors.

The tensions have impacted semiconductor companies in the U.S. and globally which either export chips or manufacture chips in China. Semiconductor companies such as Nvidia and AMD has seen a 40 percent decline in stock price over the past year.