The computer chip ban signals a new era where Biden and Xi meet

WASHINGTON (AP) — 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 — one where trade matters less than an increasingly intensified competition to be the world’s technological and economic leader. Military force.

The aggressive move, announced last month, will help set the tone for President Joe Biden’s upcoming meeting With Chinese President Xi Jinping On Monday, on the sidelines of the G20 summit in Asia. It is evidence of Biden’s determination to “manage” the US competition with China, whose officials were quick to condemn it Export ban.

After more than two decades in which the focus has been on expanding trade and global growth, both countries are openly prioritizing their national interests as the global economy struggles with soaring inflation and the threat of deflation. Both the United States and China have limited the development and production of computer chips As vital to economic growth and their own security interests.

“We will do whatever it takes to protect Americans from the threat of China,” said Commerce Secretary Gina Raimondo he said in an interview. “China is crystal clear. They will use this technology for surveillance. They will use this technology for cyberattacks. They will use this technology, in any number of ways, to harm us and our allies, or to harm our ability to protect ourselves.”

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

“In order to enhance China’s innovation capacity, we will move faster to launch a number of major national projects of strategic importance, big picture and long-term,” Xi said.

The Chinese government has identified developing advanced computer chips that can handle everything from artificial intelligence to hypersonic missiles as one of its top priorities. To fill the gap so it can get there, China has been dependent on imports of advanced chips and manufacturing equipment from the United States, which imposed a series of export controls last month that prevent chips and more advanced factory and manufacturing equipment from being sent to China. Experts associated with America.

The United States and its allies have been known to deploy export controls against Russia After the February invasion of Ukraine, which made it difficult for the Russian forces to resupplied them with weapons, ammunition, tanks and aircraft. As a result of these restrictions, Russia has relied on drones from Iran The United States blames North Korea to supply them with artillery.

Until recently, the United States operated on the premise that strong trade relations would bring countries closer together in ways that would make the world safer and richer, the post-Cold War order. Global supply chains were supposed to reduce costs, increase profits, and enable democratic values ​​to infiltrate the terrain of oligarchy, dictatorship, and authoritarian regimes.

But after a global pandemic, the 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 strategies. Both the United States and the European Union have provided tens of billions of dollars in incentives to stimulate more domestic production of computer chips.

In a speech last month at IBMChina specifically lobbied against a law providing $52 billion for advanced semiconductor production and development in the United States, Biden said, an incentive package that followed a series of announcements by Intel, Micron, Wolfspeed and others about building computer chip factories. in the United States.

He said some Republican lawmakers who opposed the measure agreed with the arguments put forward by China.

“The Chinese Communist Party has been lobbying in the US Congress against passing this legislation,” Biden said. “Unfortunately, some of our friends on the other team bought it.”

Donald Trump has had tough rhetoric on China during his presidency, imposing tariffs That the Biden administration has not yet lifted it. But by any qualitative measure, the export ban on computer chips is tougher than anything imposed by Trump, said Gregory Allen.Senior Fellow in the Strategic Technologies Program at the Center for Strategic and International Studies.

Tariffs under Trump were significant in dollar terms, Allen said, but had almost no effect on the trade balance. Nor were import taxes strategic. The export controls imposed by the Biden administration would be a setback for Chinese technology that is already decades behind the United States

“We’ve basically committed ourselves to saying, ‘China is not going to meet your first target,'” Allen said.

The era of China, Russia and other competitors with relatively unfettered access to the US and European markets appears to be ending, said Christopher Miller, a Tufts University professor and author of The Chip Wars.

“The risks posed by these countries have grown, so Western leaders have reconsidered the wisdom of giving adversaries open access to their markets,” Miller said.

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

“All the great powers are restructuring international economic relations in ways that they hope will improve their geopolitical position,” Miller said. “Semiconductors are just one of many areas where trade, technology and capital flows are being re-politicized by great power rivalry.”

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