"Preventing Distortion of China's Semiconductor Market"… US and EU Join Forces on Investment Regulations

The United States and the European Union (EU) are preparing a joint regulatory proposal to restrict investments in advanced technology sectors such as semiconductors in China. Following the announcement of a joint stance by the Group of Seven (G7) leaders against China's economic coercion, the US and the EU are intensifying pressure on China. Amid escalating competition between the US and China involving retaliatory sanctions over semiconductor technology dominance, the US is strengthening cooperation with its allies to tighten the encirclement aimed at containing China.

According to Bloomberg and other sources on the 23rd (local time), the US and the EU will discuss cooperation measures to address sensitive technology investment issues related to China at the 4th Trade and Technology Council (TTC) meeting scheduled for the 30th?31st in Lule?, Sweden. In a draft statement prepared ahead of the meeting, the US and the EU stated, "We will coordinate our approaches to foreign investment screening to prevent our companies' capital, expertise, and knowledge from supporting technological advances of strategic competitors in ways that threaten national security." Both sides agreed to seek cooperative measures to address non-market policies and practices of countries like China and their distorting effects, particularly in fields such as semiconductors.

Launched jointly by the US and the EU in 2021, the TTC ostensibly aims to jointly address unfair trade practices and cooperate on technological issues such as semiconductors and artificial intelligence (AI). Ultimately, however, it seeks to strengthen cooperation among allied countries to curb China's technological rise. The upcoming 4th TTC meeting follows the G7 leaders' public warning on the 20th that "China must not attempt unilateral changes to the status quo by force," and aims to expand cooperation for supply chain diversification and increase pressure on China.

[Image source=AP Yonhap News]

Recently, the EU presented a new China policy, with Ursula von der Leyen, President of the European Commission (EC), describing the relationship with China not as "decoupling" but as "de-risking." De-risking, used in contrast to decoupling, means maintaining economic cooperation with China while reducing risks from excessive dependence. President von der Leyen explained, "Severing ties with China is neither feasible nor in Europe's interest," adding, "We should focus on eliminating risk factors rather than decoupling from China."

Economic security concerning the US and other G7 countries, which has emerged due to Russia's invasion of Ukraine, will also be discussed. Bloomberg reported, "Accordingly, both sides are exploring new policy options at this meeting to address national security risks raised in a hostile manner by some countries."

Additionally, both sides emphasized efforts to avoid a subsidy race in semiconductors and agreed to seek enhanced cooperation on emerging technologies including AI, quantum computing, and 6th generation communication technology (6G). Regarding generative AI, which has recently become controversial with tools like ChatGPT, they stated, "The development of generative AI presents tremendous opportunities alongside the need to address associated risks," and "The US and the EU will form an expert group to align AI regulatory approaches and collaborate on establishing 65 core AI terms and standards."

Meanwhile, the agenda for the 4th TTC meeting, released on the same day, is expected to be adopted at the meeting held next week in Sweden after approval by member countries.

This content was produced with the assistance of AI translation services.