The Biden administration has announced new restrictions on technology exports to China which are meant to undercut Beijing's ability to develop wide swaths of its economy
- From semiconductors and supercomputers to surveillance systems and advanced weapons, the two countries are now officially in an "economic war," and there is no possibility of reconciliation any longer
Chinese state media and officials over the weekend raged against the action, warning of economic consequences and stirring speculation about potential retaliation.
- "This is the US salvo against China's efforts to build its domestic tech capabilities," said Patel, who estimates the restrictions could reduce global technology and industry trade by hundreds of billions of dollars.
The new restrictions are necessary to stop China from becoming more of an economic and military menace
- China has poured resources into developing supercomputing capabilities and seeks to become a world leader in artificial intelligence by 2030
- It is using these capabilities to monitor, track and surveil their own citizens and fuel its military modernization
Reaction in China
- The nationalistic Global Times warned the "savage attack on free trade" would have dire consequences for the US.
- China's Foreign Ministry spokesperson Mao Ning said the measures are unfair and will "deal a blow to global industrial and supply chains and world economic recovery."
- Commerce also put in place a raft of restrictions on supplying US machinery that's capable of making advanced semiconductors.
The restriction on YMTC may impact Lam Research the most, though Western Digital will benefit from reduced competition
- The intent to slow down military supercomputers is clear, but there is potential for a protracted slowdown in adjacent markets as well
- New rules could lead to DUV lithography restrictions to China and new data center processor restrictions
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