The Bureau of Industry and Security shouldn’t renew the one-year authorizations it gave to certain foreign chip companies as part of its Oct. 7 China chip controls unless the agency makes “significant” changes to the restrictions when it finalizes the controls in the coming months, said Derek Scissors, a China policy expert with the American Enterprise Institute. Scissors said extending the licenses beyond their October expiration would “undermine” the Biden administration’s goal of denying China advanced semiconductor technology and unfairly advantage foreign companies over U.S. firms.
Exports to China
Commerce Secretary Gina Raimondo this week declined to say when she expects the Bureau of Industry and Security to finalize its Oct. 7 China chip controls (see 2210070049, saying it’s more important to her that the agency takes its time and gets the updated restrictions “right.” She also said she doesn’t see Chips Act funding and restrictions on American chips sales to China as contradictory and denied reports that the administration has delayed new export controls against China in an effort to limit damage to its relationship with Beijing.
Sen. Marco Rubio, R-Fla, introduced a bill this week that could lead to new export controls on certain U.S. “genetic technology” destined to China. The Stopping Genetic Monitoring by China Act would add various types of “genetic sampling and testing kits, analytical technology, and software” to the Bureau of Industry and Security’s Commerce Control List, including:
The Senate this week voted to attach amendments to its version of the FY 2024 National Defense Authorization Act, including one that could establish a notification regime for certain outbound investments and another that could ban China, Russia, North Korea and Iran from investing in American farmland and agricultural businesses.
The Bureau of Industry and Security is drafting a final rule to expand its nuclear nonproliferation controls on China and Macau. The agency sent the rule for interagency review July 24.
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A former U.S. trade representative and treasury secretary this week cautioned the Biden administration as it prepares to introduce a new outbound investment screening regime, saying new authorities like these tend to expand over time and could eventually be used beyond their intended purpose.
A spokesperson for China's Ministry of Commerce said China is "deeply dissatisfied" with Japan's export restrictions on semiconductors (see 2303310031), which took effect July 23 "[d]espite China's serious concerns." The spokesperson said during a press conference this week that the country has made "serious démarches to Japan at various levels." Imposing trade restrictions "to push for decoupling and disrupt" high-tech supply chains is "wrong and against the law of the market economy, the principle of free trade and international economic and trade rules," the spokesperson said. China wants Japan to keep its larger trading relationship in mind and "not to abuse export controls," the spokesperson said.
Commerce Secretary Gina Raimondo, whose department is responsible for three of the four pillars in the Indo-Pacific Economic Framework, told a think tank audience that she is "determined to finalize agreements with all of these countries on all three pillars I’m managing" by a summit at the end of November. The IPEF, which does not liberalize tariffs but does seek to lower non-tariff barriers in its trade pillar, also includes a tax and anti-corruption pillar, an infrastructure and decarbonization pillar, and a supply chain pillar, which was already agreed to earlier this year.
U.S. policymakers should explore new ways to restrict transfers of items and services that China may be using to advance its artificial intelligence capabilities, such as data, algorithms and human capital, the Center for a New American Security said in a report this week. Although the administration should “aggressively” restrict exports to China of advanced semiconductor equipment, the report said Washington also needs to “seek out creative tools to regulate other basic building blocks of AI.”