Is the US Likely To Revise Its Chip Blockade on China?

It has been reported that the United States is considering introducing tougher policies on the export of chips to China, in a bid to close potential loopholes and prevent Chinese users from using high-end chips remotely or obtaining them through “smuggling channels.” U.S. strategic anxiety vis-à-vis China has led to an excessive chip policy, the implementation of which has been beset with obstacles.

First of all, the chip policy toward China is itself problematic. It ignores the coordination between new and old industrial policies at the macro level while unduly focusing on government support and export controls at the micro level, leading to chaotic and imbalanced policy implementation. The Joe Biden administration has ignored the time and cost required for industrial transfer and market adjustment, underestimated the difficulties inherent in reshoring the chip manufacturing industry, and made a rush job of things.

And second, it has been met with resistance from the enterprises involved. The U.S. government’s intervention in the chip market through policy legerdemain is essentially kleptocratic, seriously damaging the interests of enterprises concerned and affecting their global competitiveness. The U.S. Semiconductor Industry Association has issued a statement saying that the White House’s repeated adoption of overly broad, ambiguous and sometimes unilateral restrictive measures may weaken the competitiveness of the American semiconductor industry, disrupt supply chains and cause significant market uncertainty.

Once again, allies are cooperating half-heartedly. Hot on America’s heels, the EU proposed a “European edition” of the CHIPS and Science Act, mobilizing 43 billion euros to invest in a chip revitalization strategy. Although Europe claims to be developing a strategically autonomous “European core,” the actual policy rings hollow.

Setting aside the EU’s own chip demand and supply realities, it would undoubtedly be an exercise in self-defeat to ask the EU to shift from the traditional, nonadvanced process automotive application chips to the high-precision chips of its non-advantageous projects. Furthermore, Europe does not have a sufficient foundation in terms of talent, technology and market, and pushing ahead forcefully will only make it increasingly reliant on the U.S.— reduced to cannon fodder in the latter’s chip wars. Allies of the U.S. are becoming increasingly wary of and dissatisfied with America’s self-serving economic, nationalist policies, with many European countries contributing little to the American chip alliance and seeking opportunities for strategic autonomy. In addition, countries like Japan and the Netherlands have important interests that connect them to China — economic interests that they are unable to renounce completely to join with the U.S. in its de-Sinicization efforts.

Uncertainty is embedded in the future of American chip control policy aimed at China.

For one thing, it is certain that the U.S. chip war against China will continue, waged ever more intensely and widely, and influenced by the growing consensus between interest groups and the two American political parties and the inertia of the technology blockade policy.

For another, U.S. science and technology policies aimed at China are affected by multiple uncertainties. First, the policy adjustments brought about by domestic elections in the U.S. may redefine the specific direction and competitive areas such policies take; the existing CHIPS and Science Act may well survive in some other form. Second, if the huge and looming crisis in the American economy blows up, a beleaguered U.S. will have no choice but to seek to ease competition with China and adjust its current technology blockade policy. Third, in a century of upheavals, the U.S. runs the risk of strategic overreach in the geopolitical struggle, adding uncertainty to the prospects of scientific and technological competition between itself and China. Finally, if China achieves a technological breakthrough or even surpasses the U.S., the latter’s technological containment of China will collapse of its own accord, and the U.S. will have to accept reality and change the direction of its policies.

The U.S. chip war on China has caused China’s high-tech industry some temporary issues, but it has also provided a stronger impetus for China to build an independent, high-precision chip system.

The way out for China in cracking the U.S. chip blockade lies, on the one hand, in the independent research and development and outperformance of its technology; on the other, it is in establishing a more broad-based partner system of technological cooperation and industrial collaboration. With internal, technical problem-solving; technological innovation; and high-level opening up to the outside world and international cooperation, China’s breakthrough in the microchip space is just around the corner.

The author is associate professor and department head of International Political Science, Beijing International Studies University.