Beijing has taken formal action to challenge new U.S. restrictions on semiconductors and other hi-tech exports to Chinese companies by filing a suit at the World Trade Organization (WTO), as Washington presses ahead with efforts to remove China from the international technology supply chain. Beijing filed its complaint with the WTO’s dispute-settlement body, according to a statement issued by China’s Ministry of Commerce (MOFCOM) on December 12.
The Ministry accused the U.S. of using trade protectionism in curbing the export of chip products to China on security grounds. “In recent years, the U.S. side has continuously overstretched the notion of national security, abused export control measures, and hindered the normal international trade of chips and other products,” the statement read. “That threatened the stability of global supply chains and industrial chains, undermined the international economic and trade order, violated international economic and trade rules, defied basic economic laws, and harmed the interests of global peace and development.”
Beijing’s strong criticism came as the world’s two largest economies remained locked in a fierce technology war. The U.S. Commerce Department’s Bureau of Industry and Security in October updated restrictions to China’s ability to acquire high-end U.S. chip technology, equipment and even talent in a 139-page document. One analyst believed many Chinese chip firms would be “destroyed, damaged, or circumscribed” by the American export controls.
At the 20th Communist Party Congress, Chinese President Xi Jinping said the country must keep pursuing self-reliance in key technologies. Qin Gang, Chinese Ambassador to Washington, said the U.S. had made outcompeting China the purpose for all its China policies, making economic issues “politicized and weaponized”. He said more than 1,000 Chinese companies had been added to various lists for American export controls and sanctions.
Japan and the Netherlands have agreed in principle to join the U.S. in tightening controls over the export of advanced chipmaking machinery to China. Taiwan Semiconductor Manufacturing Co (TSMC) – the world’s leading producer of advanced computer chips – announced an expanded USD40 billion investment at its U.S. production hub in Arizona. The U.S. was having a “robust” dialogue with its allies on chip export controls against China and an outcome was on “standby”, said Alan Estevez, the U.S. Commerce Department’s Industry and Security Undersecretary. Estevez said the latest controls were meant to stop China from being able to build high-end chips and that U.S. allies understood Washington’s rationale.
The Ministry of Commerce (MOFCOM) said taking the dispute to the WTO was “necessary” to safeguard the country’s legitimate rights and interests. “We hope that the U.S. side will give up zero-sum game thinking, correct its wrong practices in a timely manner, stop disrupting the trade of hi-tech products such as chips, and maintain normal economic and trade exchanges between China and the U.S.,” the South China Morning Post reports.
