China’s ambassador to Washington, Xie Feng, stated that China does not desire a trade or tech war but will respond if the United States imposes further restrictions on its chip sector. Xie emphasized that while China welcomes competition, it believes that the way the United States defines competition is unfair. He specifically pointed out the existing U.S. prohibitions on Chinese imports of equipment for advanced chip production, comparing it to a swimming contest where one side is restricted to outdated swimwear while the other wears a Speedo.
Xie also mentioned reports suggesting that Washington is considering an outbound investment review mechanism and additional prohibitions on the export of AI chips to China. He stated that the Chinese government cannot remain passive in such circumstances, quoting a Chinese saying that they will not provoke but will not back down from provocations either.
While China will respond, Xie emphasized that they do not wish for a tit-for-tat situation and do not want a trade or technological war. Instead, they aspire to move beyond the barriers represented by the Iron Curtain and the Silicon Curtain.
The Biden administration is finalizing an executive order that aims to restrict certain investments in sectors such as advanced semiconductors, quantum computing, and artificial intelligence. The goal is to complete the reviews of this order by Labor Day, according to a senior administration official.
China retaliated against U.S. chip maker Micron Technology after Washington imposed export controls on American components and chipmaker tools to prevent their use in advancing China’s military capabilities. The Cybersecurity Administration of China announced in May that Micron failed its security review, leading to a ban on domestic infrastructure operators from purchasing its products.
U.S. Treasury Secretary Janet Yellen discussed the proposed order with Chinese counterparts during her recent trip to China. She assured that any investment restrictions would be highly targeted and directed at specific sectors of national security concern. Yellen also stated that the order would be enacted transparently through a rule-making process that allows public input.
In conclusion, China’s ambassador to Washington expressed China’s opposition to a trade or tech war but warned that they would respond if the United States imposes further restrictions on its chip sector. The ongoing discussions and potential executive order by the Biden administration have raised concerns and prompted China to take action against U.S. chip maker Micron Technology.
