China Blasts US Move to Tighten Export Controls on Quantum and Semiconductor

TMTPost -- China expressed opposition to the planned new export controls on advanced technologies including chip-related goods.

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“China is opposed to the US turning trade and tech issues into political issues and weapons. Obstructing normal cooperation on tech and trade and economic exchange violates the principle of market economy, destabilizes global industrial and supply chains and serves no one’s interest,” Chinese foreign ministry spokesperson Mao Ning commented at a regular press conference Friday.

Mao made the comment in response to an announcement of new controls by the U.S. Commerce Department Thursday, citing“national security and foreign policy reasons”. The department’s Bureau of Industry and Security (BIS) published an interim final rule (IFR) Thursday, implementing controls on critical and emerging technologies that have reached broad technical agreement among U.S. international partners. Officials will hold a 60-day public comment period before issuing a final ruling.

Under the IFR, BIS implementing worldwide export controls on specific types of items, including: quantum computing items; advanced semiconductor manufacturing equipment that are essential for the production of advanced semiconductor devices;Gate All-Around Field-Effect Transistor (GAAFET) Technology that produces or develops high-performance computing chips that can be used in supercomputers; Additive Manufacturing Items that cover equipment, components and related technology and software designed to produce metal or metal alloy components.

BIS didn’t explicitly name China in the documents, but the controls are in line with a series of moves the Biden administration has taken to restrict Beijing’s developments in areas such as semiconductor, artificial intelligence (AI) and computing. BIS said its action strengthens our international relationships with like-minded countries and ensures that U.S. export controls keep pace with rapidly advancing technologies that pose serious threats to its national security when in the wrong hands.

“The most effective way to protect our national security is to develop and coordinate our controls alongside like-minded partners, and today’s actions demonstrate our flexibility in how we craft such controls to achieve our national security objective,” said Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler.

The U.S. Commerce Department said several allies, including Japan and the Netherlands, have already announced or implemented new national controls for export of items related to quantum computing and advanced semiconductor manufacturing, and it anticipated additional countries will implement similar controls soon. The latest IFR establishes a new License Exception Implemented Export Controls (IEC) so that countries may meet the terms of IEC by implementing equivalent national controls which would eliminate the need to submit license applications for those items, according to the department.

The latest IFR came as the U.S. has been seeking leverage with allies including Japan to rein in China through access restrictions of advanced semiconductor technology. Washington feels confident that it can assuage Tokyo’s concerns and reach an agreement by the end of this year, according to the report.

A Bloomberg report in July said the Biden administration has told allies that it’s considering using the most severe trade restrictions available if companies such as Japanese firm Tokyo Electron Ltd. and ASML continue giving the country access to advanced semiconductor technology. The U.S. was reported to consider whether to impose the foreign direct product rule, or FDPR, which allows the country to impose controls on foreign-made products that use even the tiniest amount of American technology. The U.S. government is presenting the idea to officials in Tokyo and the Hague as an increasingly likely outcome if the countries don’t tighten their own China measures, according to that report.

Reuters reported late July that the U.S. government plans to roll out a new rule this month to expand exports of equipment from some foreign countries to Chinese chipmakers. It was reported that about half of a dozen Chinese semiconductor fabrication factories, which are at the center of China’s most sophisticated chipmaing efforts, will be prohibited from receiving exports from many countries. The new rule will impact exports to China from countries and regions including Taiwan, Israel, Singapore and Malaysia, but shipments from allies that export key chipmaking equipments, including Japan, the Netherlands and South Korea, will be excluded, according to Reuters’ sources.