China claims CHIPS and US Science Act will disrupt international trade, distort global semiconductor supply chain
China on Wednesday criticized a US law aimed at encouraging chip production in the United States and reducing its reliance on Asian suppliers as a threat to trade and an attack. into Chinese enterprises. The bill, signed by President Joe Biden this week, promises $52 billion in subsidies and other aid to investors in US chip factories. It responded in part to warnings that supply could be disrupted if China attacked Taiwan, which produces up to 90% of high-end chips. China’s ruling Communist Party claims the self-governing island as part of its territory.
Foreign Ministry spokesman Wang Wenbin said the measure would “disrupt international trade and distort the global semiconductor supply chain”. “China firmly opposes that.”
Sections of the law “restrict normal investment and economic and commercial activities of companies in China,” Wang said, without giving details.
Chip supply disruptions following the coronavirus pandemic have hampered production of goods ranging from smartphones to cars and highlighted the world’s reliance on Taiwanese chips and Chinese factories that assemble most of the products. electronic device.
Fears of disruption were heightened when China threatened to attack Taiwan, which was split from the mainland in 1949 after a civil war.
Beijing conducted military exercises around the island last week in retaliation for a visit by US House Speaker Nancy Pelosi. China believes that visits by US officials to Taiwan could encourage its leaders to realize de facto independence in perpetuity, a step the mainland says would lead to war. .
According to the Congressional Budget Office, the “Science and CHIPS Act” calls for research spending to total about $200 billion (about Rs. 15,81,900 crore) over 10 years.
The Communist Party has spent tens of billions of dollars developing China’s own chip industry. Its factories make low-end chips for cars and other products, but cannot supply high-end smartphones and other devices.