US, Chip Control Allies Should Prepare for Chinese Retaliation, Think Tank Says
The U.S., the Netherlands and Japan need to prepare for “expanded” Chinese retaliation as a result of their pact to impose new export controls on advanced semiconductor equipment (see 2303310031 and 2303090032), the Center for Strategic and International Studies said in a commentary this week, adding that China has “long put national security goals above those of market efficiency.”
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“The decisions by Japan and the Netherlands to join the United States in adopting new semiconductor export controls make clear that the global semiconductor market has entered a new era in which geopolitical and national security concerns will begin to weigh as much as market forces,” CSIS said.
Beijing has so far not imposed tit-for-tat export controls but instead has chosen policies that are “relatively low cost and high-yield,” the report said. Those have so far included refusals to approve acquisitions by U.S. semiconductor companies, complaints at the World Trade Organization (see 2304050025) and cybersecurity probes of American companies, including memory chip producer Micron. Chinese officials have reportedly slowed reviews of a “number” of proposed acquisitions by U.S. companies, asking the firms to first make available in China products that may be subject to U.S. export controls (see 2304050026).
“The United States and its allies need to be prepared for expanded Chinese retaliation,” CSIS said, “which at this point is already underway.”