By Guido Lanfranchi.
Amid a souring in bilateral relations between the United States and China, Washington is stepping up its efforts to put pressure on Beijing by tightening the grip on China’s high-tech industry. The latest moves include the opening of a Taiwanese chip fabrication facility in Arizona, the establishment of the so-called “5G Clean Path Initiative”, as well as a tightening of the regulations preventing Huawei to source chips produced with US technology.
A new deal with a world-renowned Taiwanese chip producer, a diplomatic initiative aimed at cutting Chinese companies off the developing 5G global supply chains, and a blow to Huawei’s capacity to develop cutting-edge technological devices. These three actions are the latest measures adopted by the United States administration in its pressure campaign aimed at weakening China’s stance in the domain of technology.
These moves – which are part of a broader US strategy aimed at containing the perceived threats posed by China – were launched against the backdrop of the latest worsening in Sino-American relations, coming on the heel of the coronavirus outbreak. “The pandemic was born of the Chinese Communist Party’s three-pronged strategy of concealment, coercion, and cooption” – accused Keith Krach, Under Secretary of State for Economic Growth, Energy, and the Environment, adding that “countries and companies are awakening to the danger” posed by China’s actions.
The first accomplishment announced by US officials concerns the opening of a new chip fabrication facility by Taiwan Semiconductor Manufacturing Company, a leading chip producer, in Arizona. Ian Steff, Assistant Secretary of Commerce for Global Markets, welcomed TSMC’s 12 billion investment, which he claimed will support “over 1,600 high-paying manufacturing jobs and thousands of additional jobs in the semiconductor supply chain”. Mr. Steff defined semiconductors’ production as a sector of “strategic national importance” and stressed that “the trend of offshoring critical manufacturing capacity in this sector must change now”.
The second initiative launched by the US is the “5G Clean Path initiative”, which aims at ensuring that “all 5G data entering or exiting US diplomatic facilities transit only through trusted equipment” – Under Secretary Krach explained, calling on US allies to join the initiative. This move would exclude Chinese vendors, such as Huawei and ZTE, which the US administration sees as untrusted.
The third leg of the US push focuses instead on tightening the Foreign Direct Product Rule, in an effort to “prevent Huawei from suing US equipment against US interests” – Acting Under Secretary of Commerce Codell Hull said. Under the new regulations, licensing requirements will be imposed “on items destined for Huawei that are produced on US-origin design or manufacturing tools” – explained Dr. Christopher Ford, Assistant Secretary of State for International Security and Nonproliferation, who accused Huawei of being complicit in the development of an “authoritarian police state” in China.
In the face of these moves by the US administration, China is currently weighing in its response. In particular, Beijing is reportedly considering imposing restrictions on major US tech companies, such as Apple, CISCO, and Qualcomm. The suspension of Chinese airplanes purchases from Boeing could also be a form of retaliation – Reuters reported, quoting a report by China’s Global Times.
About the author:
Guido Lanfranchi is a student and young professional in the field of international affairs. He has pursued his studies both at Leiden University and Sciences Po Paris, where he is currently enrolled. In parallel, he has been gaining professional experience through internships (first at the Council of the European Union, and currently at Clingendael Institute), as well as by working as reporter and associate editor for Diplomat Magazine The Netherlands. His research and work focus on the Middle East and Africa, and especially on conflict situations in these regions.
