Opinion | When the chips are down
By Tom Fowdy
Recently, China announced that it would be restricting chips made by the US firm Micron in its critical infrastructure projects, citing it as a "national security threat". In doing so, Beijing deliberately played the same card frequently used by the United States and its allies concerning its own technologies, most namely Huawei, where unfounded concerns relating to "national security" were used to exclude the telecommunications firm from participating in 5G networks, as well as the US has blacklisted thousands of other Chinese technology companies.
Ironically, despite having led an all-out policy of technological embargo against China, the United States condemned China's move accordingly, stating that "We firmly oppose restrictions that have no basis in fact". Well, isn't that ironic? Especially seen as China's move is in fact limited in scope, and does not even come close to the US's actions against it. Despite this, the US was also reported to have previously "warned" South Korea not to take up the market left behind by Micron if China went ahead with such restrictions, something which to Seoul's credit, they dismissed.
The episode nonetheless reveals the interesting double standards (yet again) in the US's attitude to China. Washington reserves its right to impose sweeping embargos on Beijing and blacklist countless companies, yet if even as much as one move is pursued the other way round, it is hastily denounced and as the G7 communique farce depicted over the previous weekend, it is so-called "economic coercion." In other words, the idea that the US and its allies are allowed to impose whatever measures they like on China, legitimately, but that it is only to be a "one-way traffic."
While this has already been previously discussed, what is more significant about this technology war between the United States and China, is that it is an extension of Washington's belief that it must military, economically and eventually, politically dominate the country. The US does not believe so much in an "equal" or "balanced" trading relationship with Beijing, as much as it believes it has an infinite right to exploit the Chinese market "on its own terms". In other words, China is to be exploited and conform to American preferences, in a very similar light how the British used superior military force to subjugate the Qing Dynasty to its terms and conditions.
In doing so, the United States desires to cripple China's leading industries, block its advances up the technology tree, diminish its global market share, and exclude it from global supply chains, in the view to strategically dominating all of it through its allies. That doesn't mean though they don't want to "trade" with China, as per the G7 communique even says. But rather it does mean they want trade and economic relations with Beijing to be exclusively for their own benefit. Hence, when China was only a low-end manufacturing nation, they could care little, but the idea that Beijing may challenge them in key strategic and technological goods, is deemed unacceptable.
This has created an inverted perspective that China must open its markets unilaterally for the West, hence even Ursula Von Der Leyden complained about "market access", but that it is acceptable for the West to place curbs on Chinese investments and exports to the country. In this sense, these policies are driven by an effort to sustain a monopoly against China, preventing a change in the global balance of economic, and therefore technological and military, power. Thus, the United States sees absolutely no problem in allowing its chip companies to sell to the Chinese market (to the things they choose), but has every problem with China manufacturing and selling its own chips accordingly.
In doing so, it was perhaps naively assumed by Washington that their technological advantages were so great that China did not have the leverage to take retaliatory action against a US chip company directly, they were wrong. US chip curbs against China's semiconductor industry have been disruptive, but they are by no means fatal. It is a bruising, but not a decapitation, and China has continued to make progress irrespectively in making technological breakthroughs in areas of chip design and lithography.
This only goes to show us that in the long run, the US strategy against China is likely to fail, and as it happens American companies will almost certainly be the biggest losers of these disastrous policies which seek to roll back globalization and exclude them from participating in the most lucrative market on Earth. Micron is the first, but it almost certainly won't be the last. Biden has overplayed his hand.
The author is a well-seasoned writer and analyst with a large portfolio related to China topics, especially in the field of politics, international relations and more. He graduated with an Msc. in Chinese Studies from Oxford University in 2018.
The views do not necessarily reflect those of DotDotNews.
Read more articles by Tom Fowdy:
Opinion | G7- A display of hypocrisy, vanity and elitism
Opinion | China should ignore Liz Truss's Taiwan stunt- It isn't worth it
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