The Biden administration announced on Monday broader restrictions on advanced technology that can be sent to China, in an effort to prevent the country from developing its own advanced chips for military equipment and artificial intelligence.
The restrictions will prohibit the sales of certain types of chips and machinery to China, and will add more than 100 Chinese companies to a restricted trade list. The move marks the Biden administration’s third major update over the past three years to a set of rules that have tried to cut China off from the world’s most advanced technology.
The rules are also likely to be the administration’s last on Chinese technology before President-elect Donald J. Trump’s inauguration next month, aiming to cement the Biden administration’s legacy in slowing down a rival country’s technological progress.
Commerce Secretary Gina Raimondo told reporters in a call on Sunday that the move represented “the strongest controls ever enacted by the U.S. to degrade the P.R.C.’s ability to make the most advanced chips that they’re using in their military modernization,” referring to the People’s Republic of China. She said the government had worked closely with experts, industry and allied countries to ensure that “our actions protect national security while minimizing unintended commercial consequences.”
National security officials have said that China’s ability to acquire and make advanced computer chips poses a threat to the United States. The chips are crucial for powering artificial intelligence and supercomputers that can be used to launch cyberattacks, design new weapons, erect surveillance systems and increase the military’s ability to respond accurately and rapidly to foreign attacks.
In October 2022, the Biden administration issued its first sweeping restrictions on China, by banning sales of advanced A.I. chips and certain chip-making machinery to the country. In October 2023, the Biden administration built on those rules to capture more types of A.I. chips.
The rules issued on Monday added 140 Chinese companies, many of which make the tools and machinery necessary for manufacturing chips, to a restricted trade list called the entity list — one of the largest batches of additions so far.
The rules also set up restrictions on shipping to China certain advanced memory chips, as well as two dozen types of semiconductor equipment and several software tools used to develop chips. Those rules will go into effect on December 31.
The department also added new requirements for companies, as they vet certain Chinese semiconductor factories, to ensure that those facilities are not diverting their technology to firms on the list.
The restrictions on shipping certain manufacturing equipment to China will apply globally, partly to address incidents in which U.S. companies might use offshore production to skirt any export ban, a senior administration official said. However, certain countries that have the capability to impose their own comparable rules will be exempted, essentially creating a pathway for allies to impose their own controls, the official said.
Japan and the Netherlands, which are home to major companies that make chip manufacturing equipment, agreed several months ago to follow U.S. rules by issuing their own restrictions on some exports. When those rules will go into effect is not clear, however, raising concerns that companies in those countries could ship more equipment to China in the coming months.
Some officials and analysts have criticized the rules, saying that they were shaped by lobbying from chip companies, and that they contain exceptions favored by industry. For example, the administration could have gone after major Chinese chipmakers more aggressively, the critics say.
U.S. equipment makers insisted that unilateral controls were hurting their performance, and that any restrictions must also apply to competitors in Japan and the Netherlands. But the effort to get allies onboard ultimately took more than a year, allowing China to stockpile equipment in the interim, some critics said.
It is still unclear if or how the Chinese government will respond. In recent years, China has expanded its own export-control laws, giving it more ability to halt exports of products like rare earth minerals, and has created an “unreliable entity list” to penalize companies that undermine national interests.
In a briefing last week, Mao Ning, the spokeswoman of China’s Foreign Ministry, said that the country “firmly opposed” what she called the “abuse of export-control measures and malicious blockade and suppression of China.”
China’s efforts to develop its own independent technology supply chains, along with the export controls that the United States has issued in recent years, are increasingly splitting the world into two spheres when it comes to advanced technologies.
Global companies have been struggling to straddle that divide. For many companies, China remains an essential economic partner, as home to most of the world’s electronics factories and as a huge consumer market in its own right.
But China is also now increasingly recognized as America’s biggest rival, the only other government with the ability and intent to challenge the United States on the world stage. China has unabashedly deployed foreign technology and leaned on private companies to strengthen the military, a situation that U.S. officials now see as untenable.
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