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China Criticizes US Semiconductor Industry Subsidies as “Cold War Mentality”

Updated: Jan 3

[Edited] In a recent development, China has once again criticized the United States' efforts to boost its semiconductor industry through subsidies.

China and US Semiconductor Industry "Cold War Mentality"
Credits: Reuters

The Chinese representative, speaking at a meeting of the World Trade Organization's Committee on Subsidies and Countervailing Measures, condemned the US actions, stating that they reflect a "Cold War mentality" and have severely disrupted the global chip supply chain.

The US government, under the Chips and Science Act signed into law by President Joe Biden, has allocated a staggering US$53 billion to support domestic chip production and research. However, China sees this move as part of a larger strategy by the US to hinder its own technological progress.

According to Xinhua, the Chinese state-run news outlet, the representative argued that these industry subsidies allow the US to interfere with the allocation of market resources. They also accused the US of adopting double standards, being harsh on others while being lenient on itself.

Furthermore, the combination of US chip industry subsidies and export control measures has had a severe impact on the global semiconductor supply chain. The Chinese representative emphasized that these actions demonstrate Washington's Cold War mentality and hegemonic behaviors, causing damage not only to China but also to the US and its allies.

Semiconductor Chip
Credits: REUTERS/Kim Kyung-Hoon

This latest criticism from China comes after Beijing initiated WTO dispute proceedings against the US in December, claiming that the semiconductor export control measures are inconsistent with the US's obligations under multiple WTO agreements. In January, China also called for a review of the US-Netherlands-Japan agreement, suggesting that it may have violated the principle of openness and transparency of the trade body.

Beijing is now urging the WTO to strengthen its supervision of US actions that violate WTO rules. These mounting protests highlight the growing divide between China and the US in terms of semiconductor supply chains and may foreshadow further measures by the US to contain China's chip sector development.

In response to the US's efforts, the Netherlands has pledged to join in curbing advanced chip and equipment exports to China, while Japan has announced stricter regulations on the export of cutting-edge chip-making tools. The China Semiconductor Industry Association (CSIA), a state-backed trade group, has expressed concerns about Japan's restrictions, stating that they will bring greater uncertainties to the global chip industry.

As tensions continue to rise between China and the US in the tech sector, it remains to be seen how this ongoing dispute will impact the global semiconductor industry and the future of technological innovation.

  • China criticizes US semiconductor industry subsidies as a "Cold War mentality"

  • Chinese representative accuses the US of interfering with market resources and adopting double standards

  • US chip subsidies and export control measures disrupt the global semiconductor supply chain

Source: SCMP

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