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The chip wars take a dramatic turn
Published 18 October 2022
The Biden administration’s announcement on new export controls restricting access to semiconductor technologies represents a watershed in US-China trade. Will US efforts risk driving Chinese development and reducing US sales to a key market? Does the trade slowdown signal a recession? Will an overt industrial policy help the US counter Chinese competition? Check out our new reading list on global trade.
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The US blocking China’s access to semiconductor technologies | Trade is slowing down | US-style industrial policy | Digital trade is having a moment | More research from Hinrich Foundation
The US blocking China’s access to semiconductor technologies
The Biden Administration’s announcement on new export controls restricting access to semiconductor technologies and personnel represents a watershed moment in US-China trade. The Biden Administration is clamping down on China’s access to semiconductors, reports the New York Times, and in doing so, may be choking off China’s abilities to shape artificial intelligence, according to an in depth analysis from Gregory C. Allen of the Center for Strategic and International Studies. The US is dramatically expanding the scope of its export controls, per Edward Alden in Foreign Policy.
American firms could lose out while Chinese companies elude some bans, reports Scott Foster in Asia Times, though, the new rules could be very bad for both American and Chinese firms, according to Paul Triolo and Kendra Schaefer, writing for the China Project. The new rules bar American citizens from aiding Chinese semiconductor development, stranding some tech executives, reports Nikkei Asia.
The new rules are just the latest in a series of actions taken by the Biden Administration to restrict Chinese access to cutting-edge technologies, says Reva Goujon of the Rhodium Group. The Wire China has a useful summary of the complexities of the semiconductor supply chain.
- Biden Administration Clamps Down on China’s Access to Chip Technology – Ana Swanson, The New York Times, 7 October 2022.
The US takes a more aggressive approach to hinder China’s development of critical technologies.
- Choking Off China’s Access to the Future of AI – Gregory C. Allen, Center for Strategic and International Studies, 11 October 2022
The impact of and motivations for the Biden Administration’s aggressive moves on tech exports to China.
- Washington Raises Stakes in War on Chinese Technology – Edward Alden, Foreign Policy, 11 October 2022.
The US builds on its Cold War playbook when it comes to Chinese technological development.
- China on course to elude US chip-making equipment bans – Scott Foster, Asia Times, 3 October 2022.
Will US efforts to cut China off from critical technologies drive Chinese development while barring US sales to a key market?
- New U.S chip rules could be very bad, for American and Chinese firms – Paul Triolo and Kendra Schaefer, The China Project, 5 October 2022
Restrictions on US semiconductor sales could reshape trade and development of advanced technologies.
- China's 'sea turtle' tech executives stranded by U.S. crackdown – Cheng Ting-fang, Nikkei Asia, 11 October 2022
How will new US export control rules affect the operations of Chinese semiconductor firms managed by US citizens?
- Running Target: Next-Level US Tech Controls on China – Reva Goujon, Rhodium Group, 28 September 2022
Rhodium Group provides a useful summary of the drumbeat of actions the US Government has taken.
- Semiconductor Shakeup – Eliot Chen, The Wire China, 11 September 2022
A quick explainer of the key parts of the global semiconductor supply chain and the way forward.
Trade is slowing down
Growth in trade volumes has slowed in 2022, and is expected to remain low in 2023, given multiple economic shocks weighing on trade, according to the WTO, while the IMF says that the slowdown has been sharper than expected and offers bleak predictions for 2023, in their October 2022 World Economic Outlook. Do these indicators point to a recession? The Wall Street Journal attempts to connect the dots. The untangling of supply chains is not necessarily good news, explains Alan Beattie in the Financial Times.
- Trade Growth to slow sharply in 2023 as global economy faces strong headwinds – World Trade Organization, 5 October 2022.
Multiple economic shocks are weighing on trade, with lower levels of growth expected for 2023.
- October 2022 World Economic Outlook – International Monetary Fund, 13 October 2022.
IMF declares that the world has experienced a sharper than expected slowdown, and offers bleak predictions for 2023.
- WTO Sees Sharp Slowdown in Global Trade, Pointing to Possible Recession – Paul Hannon, The Wall Street Journal, 5 October 2022
Total exports and imports of goods are likely to grow by just 1% in 2023.
- Why the untangling of global supply chains isn’t good news – Alan Beattie, Financial Times, 10 October 2022
Supply chain problems are lessening, likely because of weakening demand for goods and negative global economic shocks.
US-Style Industrial Policy
The United States is adopting more overt forms of industrial policy in an attempt to address systemic economic issues and counter rising competition from China. Will it work? Implementation will be the key, according to John M. Deutch and Ernest J. Moniz, writing in Foreign Affairs. The US should not follow China’s example, writes Scott Kennedy for the Center for Strategic and International Studies.
- How America Can Make Industrial Policy Work – John M. Deutch and Ernest J. Moniz, Foreign Affairs, 7 September 2022
The US Congress recently passed three serious pieces of legislation that amounts to industrial policy
- China Is the Wrong Industrial Policy Model for the United States – Scott Kennedy, Center for Strategic and International Studies, 9 August 2022
China is often cited as adopting successful industrial policies, but are they successful and replicable?
Digital trade is having a moment
Digital trade is the focus of many ongoing negotiations. What are the quick wins that negotiators can achieve? The Trade Experettes have ten answers.
- Ten “Quick Wins” for Digital Trade – Trade Experettes, 21 September 2022
Ten ideas for how to achieve a global consensus on digital trade.
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