China Criticizes US AI Chip Export Controls... US Big Tech Also Voices Concerns

As the United States decided to implement export controls on artificial intelligence (AI) semiconductors effectively targeting China, the Chinese government strongly protested. On the 13th (local time), just a week before the end of his term, the Biden administration announced new export controls that allow the sale of semiconductors necessary for AI development without restrictions to allies such as South Korea, while setting import limits on AI semiconductors for countries that are neither allies nor concern countries. This move is interpreted as an effort to block China, which is already restricted from accessing advanced semiconductors by the U.S., from securing advanced AI semiconductors through third countries.

원본보기 아이콘

According to China Central Television (CCTV), a spokesperson for the Chinese Ministry of Commerce criticized the U.S. announcement of country-specific AI semiconductor import caps, stating, "this measure places obstacles on normal trade activities between China and third parties and constitutes unwarranted interference." The spokesperson added, "The Biden administration ignored the reasonable voices of the industry and hastily announced the measure, expanding the concept of national security and abusing export controls. This is a clear violation of international multilateral trade rules, and China strongly opposes it."

In a brief 350-character statement, the Chinese Ministry of Commerce spokesperson repeated the word 'seriously' four times to strongly criticize the U.S. action. The spokesperson emphasized, "The Biden administration is abusing export control measures to seriously disrupt normal trade among multiple countries and severely damage market order, and China will take necessary actions to firmly safeguard its legitimate rights and interests."

On the same day, the U.S. Department of Commerce maintained existing export controls for over 20 concern countries including China, Russia, and North Korea, but set limits on the quantity of AI semiconductors that countries which are neither allies nor concern countries can import from the U.S. Countries subject to AI semiconductor import quantity restrictions must purchase within a quota of 50,000 graphics processing units (GPUs) allocated per country unless they obtain the status of 'Nationally Verified End User (NVEU)'.

The Biden administration announced this measure near the end of its term based on the judgment that China is importing advanced semiconductors through third countries to evade U.S. export control networks. Following the 2022 ban on exporting advanced semiconductor manufacturing equipment to China and the 2023 ban on exporting lower-spec AI chips to China, it was reported last year by foreign media that China was purchasing Nvidia AI accelerators through paper companies located overseas in places like Singapore. Despite U.S. sanctions, China's semiconductor imports have continued to increase as it pursues semiconductor development. According to Hong Kong's South China Morning Post (SCMP), semiconductor imports into China from January to November last year rose by 15% compared to the same period the previous year.

The U.S. big tech industry also publicly opposed the measure, fearing a slowdown in business growth. Ned Finkel, Vice President of Government Affairs at Nvidia, which will be most affected, stated, "This measure risks wasting the technological advantages that the U.S. has hard-earned by manipulating market outcomes and suppressing competition," and pointed out, "The U.S. wins by sharing innovation, competition, and technology globally, not by retreating behind walls of government overreach."

Some speculate that President-elect Donald Trump might overturn this measure. There is a 120-day public comment period for this measure. Republican Senator Ted Cruz said on the day that he is considering legislative actions such as the Congressional Review Act, which grants Congress the authority to repeal new executive regulations, as soon as President Biden's term ends.

However, Jake Sullivan, White House National Security Advisor, emphasized in a Bloomberg interview that since there is consensus on national security, it is highly likely that this measure will remain even if a second Trump administration takes office. He said, "The Trump administration may adjust the degree of restrictions, but the core parts will remain intact."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.