The Americans decided on further trade restrictions to counter the modernization of the Middle Kingdom’s army. The Chinese foreign ministry and the US embassy protest.
The economic rivalry between Washington and Beijing continues to intensify. The Americans want deglobalization, which is not in favor of the Chinese.
Order of the US President
President Joe Biden has signed an executive order banning US companies from investing in China’s technology industry. The ban covers quantum technologies, semiconductors, microelectronics and some artificial intelligence systems.
This legal act applies to future investments, but not to investments already started. At the same time, it does not prevent the Ministry of Finance from requiring disclosure of past transactions. The scheme will take effect in the new year.
The document covers private equity, venture capital, joint ventures and greenfield investments.
China protests
China’s foreign ministry addressed the US side with an official statement expressing its strong opposition.
“This is gross economic coercion and technological harassment, an act that seriously undermines the principles of a market economy and fair competition, undermines the international economic and trade order, destabilizes global industrial and supply chains, and harms the interests of both China and the United States. , as well as the entire world community.” Business,” it said.
Power rivalry
At the same time, Americans are developing their own capabilities and investing billions of dollars in semiconductors, among other things. In August 2022, US President Joe Biden signed the CHIPS and Science Act, which will provide the state with $280 billion for advanced technology production and scientific research in areas such as semiconductors.
For example, the new regulations include tax breaks for companies that build factories that produce computer chips in the US, invest in chips, but also spend government money on robotics and wireless communications.
Semiconductors are essential in many devices, including computers, smartphones or cars, but also necessary for the military industry. Joe Biden described the investment bill as “once in a generation”.
Chinese authorities also announced the launch of a US$143 billion national semiconductor industry development program.
In this regard, it is worth noting that the world’s largest semiconductor producer is the Republic of China or Taiwan. The island, in turn, is under constant threat from China proper, the People’s Republic of China.
Source: Do Rzeczy
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
