China’s leaders fume over the new CHIPS for America Act.
Beijing has roundly decried Washington’s recently passed CHIPS for America Act. Chinese spokespeople have promised retaliation, though China’s leadership have not yet revealed what steps they plan to take, if any.
The problem seems to center on the $52 billion that the $280 billion bill reserves to subsidize for semiconductor production in the United States. Beijing believes this will curtail western investment flows. The funding is important to China but so is the access to the western technologies that investment brings. On both these points Beijing has been exceptionally open about its dependence, stating that a domestic orientation for American-based producers will retard the Middle Kingdom’s efforts to build up its own semiconductor industry. It is a strange thing to say on the heels of Beijing’s innumerable boasts about China’s scientific and engineering prowess. Such utterances all but admit the country’s dependence on western innovation. It also points up China’s urgent needs, for today China’s chip manufacturing effort can only supply some 10-15 percent of the country’s demands.
Beijing’s fulminating has found several outlets. China’s embassy in Washington has declared that Beijing is “firmly opposed” to the legislation that is officially entitled the Creating Helpful Incentives to Produce Semiconductors for America Act.
