US Bans ‘Advanced Tech’ Firms from Building Factories in China

Facts

• In a $50B plan to build up the US semiconductor industry, the Biden admin. announced on Tues. that American tech companies who receive federal funding will be barred from building “advanced technology” facilities in China for 10 years.
• Congress approved the US Chips and Science Act in August, which allocates $280B to high-tech manufacturing and scientific research as US firms demand more government support to reduce their reliance on components produced in Chinese factories.
• Currently, China lacks the software, equipment, and capabilities to produce advanced chips. The technology gap has increased in the escalating tech war between Washington and Beijing.
• The US currently only produces around 10% of the world’s supply of semiconductors, with most chips being manufactured in factories in Taiwan and South Korea.
• China, through its embassy in Washington, expressed opposition to the semiconductor bill, calling it reminiscent of a “Cold War mentality.”

Sources:  The Guardian, BBC News, and SCMP.

Narratives

• Anti-China narrative, as provided by The Guardian. The Biden admin.’s focus on strengthening US semiconductor and microchip production is essential to securing America’s national interests. As China threatens its neighbors in East Asia — who happen to be the US’s main sources of semiconductors and microchips — it’s essential that Americans get the upper hand domestically in this sector.
• Pro-China narrative, as provided by Global Times. American attacks on Chinese advanced technology products are a political stunt that will only serve to weaken the US and strengthen China. While PRC innovation may be slowed in some fields in the short term, Beijing has shown its technological prowess with its advancements in 4G and 5G information technology, high-speed railway technology, and the aerospace industry. China’s tech sector is resilient.