https://sputnikglobe.com/20230811/why-bidens-investment-ban-wont-stop-chinas-microchip-industry-1112538373.html
Why Biden's Investment Ban Won't Stop China's Microchip Industry
Why Biden's Investment Ban Won't Stop China's Microchip Industry
Sputnik International
The Biden administration has restricted American investments in China's semiconductors and microelectronics, quantum computing and certain artificial intelligence capabilities as part of a broader trade tit-for-tat.
2023-08-11T14:30+0000
2023-08-11T14:30+0000
2023-08-11T14:30+0000
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paul craig roberts
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Joe Biden signed an executive order on August 9 aimed at curbing US investments in China's sensitive technologies citing Beijing's alleged incentive "to counter the United States and allied capabilities." The measure particularly targets private equity, venture capital, joint ventures and greenfield investments."Biden's executive order might simply reflect posturing to look tough or it might be a product of the neoconservatives' desire to stir up conflicts between the US and the two powers – China and Russia – that serve as constraints on Washington's unilateralism," the economist explained.Dr. Roberts highlighted that many Chinese scientists were educated in the US, while scientific and technological knowledge are now available in peer-reviewed journals and in contacts between scientists. "In other words, there are few secrets," he stressed.Whether one likes it or not, China holds the upper hand in the unfolding tit-for-tat game, according to the economist. In his earlier interviews with Sputnik, Dr. Roberts warned that the problem the American economy faces is that US manufacturing has been "offshored", that is, moved to China and other Asian locations.Furthermore, China is America's largest creditor, Dr. Roberts noted: "If China dumped its holdings of US Treasuries chaos would follow," he said.How Could China Retaliate?In response to Biden's latest executive order, the China leadership warned that the investment restrictions "will seriously undermine the interests of Chinese and American companies and investors" and will reduce "the confidence of the international community in the US business environment," as per Liu Pengyu, spokesman of the Chinese Embassy in Washington."We have to say, first of all, that weaponizing trade is an old story under the US presidents, but also in the past during the Cold War. Moreover, we have to consider that this new acceleration implementing a sort of new Cold War by the United States, that only the United States is trying to implement, along with the European Union at a certain extent. Actually, United States and the collective West lost their primacy at the world level, and now they are trying to destroy the neoliberal form of globalization, offering, as I say, the new version of the Cold War."Parenti has drawn attention to the fact that Biden's new anti-China measures could affect US firms' profitability, spoil relations with China and hinder the US business' access to the big and lucrative market of the People's Republic.The expert particularly cited Beijing's recent decision to slap restrictions on the imports of critical rare earths. China's ban on gallium and germanium exports – two critical elements for making semiconductor chips – came into force last week sending shivers to US manufacturers. The crux of the matter is that China produces upwards of 80% of the world’s gallium and 60% of its germanium."The main process that we are going to see in the structural tendencies in the next years will be a reduction from the China side," the expert said. Meanwhile, a whole set of US measures aimed at disrupting Beijing's technological rise – starting from restrictions on China's semiconductor industry under the CHIPS Act and ending with the investment ban – are de facto accelerating the process of People's Republic becoming technologically independent from the US, according to Parenti. Eventually, Washington's measures could indirectly boost China's technological competitiveness vis-à-vis the US and contribute to the unfolding geopolitical reorganization towards a more equitable multi-polar world order, the expert concluded.
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semiconductors, chip, microchip, china hi-tech, biden's executive order, ban on us investment in china, us-china trade war, chinese technological rise, micron, chinese rare earths, china ban on rare earth metal exports, us ban chip sales to china, semiconductor ban china, china response to us chip ban, restrict investments china citing security threats, us considers new curbs on ai chip exports to china
semiconductors, chip, microchip, china hi-tech, biden's executive order, ban on us investment in china, us-china trade war, chinese technological rise, micron, chinese rare earths, china ban on rare earth metal exports, us ban chip sales to china, semiconductor ban china, china response to us chip ban, restrict investments china citing security threats, us considers new curbs on ai chip exports to china
Why Biden's Investment Ban Won't Stop China's Microchip Industry
The Biden administration has restricted American investments in China's semiconductors and microelectronics, quantum computing and certain artificial intelligence capabilities as part of a broader trade tit-for-tat.
Joe Biden signed an
executive order on August 9 aimed at curbing
US investments in
China's sensitive technologies citing Beijing's alleged incentive "to counter the United States and allied capabilities." The measure particularly targets private equity, venture capital, joint ventures and greenfield investments.
"China has no need for US capital. It can finance all that it cares to finance," Dr. Paul Craig Roberts, an American economist and author who was assistant secretary of the Treasury in the Reagan administration and associate editor of The Wall Street Journal, told Sputnik, reflecting on the meaninglessness of Biden's move.
"Biden's executive order might simply reflect posturing to look tough or it might be a product of the neoconservatives' desire to stir up conflicts between the US and the two powers – China and Russia – that serve as constraints on Washington's unilateralism," the economist explained.
Dr. Roberts highlighted that many Chinese scientists were educated in the US, while scientific and technological knowledge are now available in peer-reviewed journals and in contacts between scientists. "In other words, there are few secrets," he stressed.
Whether one likes it or not, China holds the upper hand in the unfolding tit-for-tat game, according to the economist. In his earlier interviews with Sputnik, Dr. Roberts warned that the problem the American economy faces is that
US manufacturing has been "offshored", that is, moved to China and other Asian locations.
"So much of US manufacturing for the domestic US market resides in China that a real trade war would deprive US corporations, such as Apple, of products to sell in US markets and thereby would result in a decline in US corporate revenues," he remarked.
Furthermore, China is America's largest creditor, Dr. Roberts noted: "If China dumped its holdings of US Treasuries chaos would follow," he said.
How Could China Retaliate?
In response to Biden's latest executive order, the China leadership warned that the investment restrictions "will seriously undermine the interests of Chinese and American companies and investors" and will reduce "the confidence of the international community in the US business environment," as per Liu Pengyu, spokesman of the Chinese Embassy in Washington.
"Surely the new American measures will be a boomerang for America's economy, above all for the high tech sector," Fabio Massimo Parenti, associate professor of international political economy and global studies at China Foreign Affairs University, told Sputnik.
"We have to say, first of all, that weaponizing trade is an old story under the US presidents, but also in the past during the Cold War. Moreover, we have to consider that this new acceleration implementing a sort of new Cold War by the United States, that only the United States is trying to implement, along with the European Union at a certain extent. Actually, United States and the collective West lost their primacy at the world level, and now they are trying to destroy the neoliberal form of globalization, offering, as I say, the new version of the Cold War."
Parenti has drawn attention to the fact that Biden's new anti-China measures could affect US firms' profitability, spoil relations with China and hinder the US business' access to the big and lucrative market of the People's Republic.
The expert particularly cited Beijing's recent decision to slap restrictions on the imports of critical rare earths. China's ban on gallium and germanium exports – two critical elements for making semiconductor chips – came into force last week sending shivers to US manufacturers. The crux of the matter is that China produces upwards of 80% of the world’s gallium and 60% of its germanium.
"The main process that we are going to see in the structural tendencies in the next years will be a reduction from the China side," the expert said.
"A step-by-step reduction of United States investment is if this approach will be kept in place by the United States. So it means that China will organize. It still organizes itself in order to reduce gradually access to the market for US strategic firms, and they can retaliate on other raw materials exports on another kind of end-product exports that will affect consistently the, for example, green transition both in Europe and the United States that rely a lot on Chinese market and suppliers and are not able to replace them in an easy way. And this process of replacing and reshoring will take many, many years in a political system, very unstable, like in both Europe and United States."
Meanwhile, a whole set of US measures aimed at disrupting Beijing's technological rise – starting from restrictions on China's semiconductor industry under the CHIPS Act and ending with the investment ban – are de facto accelerating the process of People's Republic becoming
technologically independent from the US, according to Parenti.
Eventually, Washington's measures could indirectly boost China's technological competitiveness vis-à-vis the US and contribute to the unfolding geopolitical reorganization towards a more equitable multi-polar world order, the expert concluded.
