Recently, Hong Kong Zhongtong News Agency interviewed Professor Yu Miaojie, deputy secretary of the Party Committee and president of Liaoning University. The original text and link are reproduced as follows:
Global semiconductor stock price plummets. The United States restricts China from biting itself.
Hong Kong China News Agency, October 11 — The US government announced on Oct. 7 that it would implement new chip export controls on China, which triggered a sharp drop in global semiconductor stocks this week. The market was generally worried that the US would cut off the supply of chips to China in the most radical way, which would also bite itself and hit the global semiconductor industry even harder. The interviewed bluntly said that the United States lifted a rock only to drop it on its own toes, which was not conducive to the development of American chips, and even had a disastrous impact on the global semiconductor industry.
Photo from Hong Kong China News Agency
After the U.S. government announced on Oct. 7 that it would impose new chip export control on China, global chip stocks collapsed. The semiconductor index of Philadelphia Stock Exchange plunged more than 9% for two consecutive days on Oct. 10 and Oct. 11, the semiconductor enterprise index of China fell nearly 7% on Oct. 10, and related stocks such as chips in Japan, South Korea and Taiwan Province also plunged across the board on Oct. 11. According to the statistics of Bloomberg on Oct. 11, the total market value of the global chip industry evaporated by more than 240 billion USD.
The United States’ comprehensive overweight restrictions on chip exports to China, involving advanced chips, supercomputing, chip R&D and manufacturing, scope of license application, and talent flow, are regarded as the biggest policy shift of the United States in exporting technology to China since 1990s, which greatly expands the scope of the US’s attempts to slow down China’s progress in high-tech fields.
In this regard, Yu Miaojie, President of Liaoning University and member of the Economic and Trade Policy Committee of the Ministry of Commerce, analyzed and pointed out in an interview with Hong Kong China News Agency on the 11th that China’s semiconductor development is at a critical moment. In the short term, it will indeed be subject to certain pressure brought by the new regulations of the US. However, in the long run, China’s semiconductor industry has the ability of independent innovation, and it is fully capable of turning pressure into power to break through blockades and barriers in line with the “Made in China 2025” plan.
Yu Miaojie continued to point out that, however, China is not without countermeasures, such as restricting the export of rare earths or charging higher export tariffs on rare earths, which will be a fatal blow to the American semiconductor industry.
Yu Miaojie puts it: “At present, international economic and trade integration has been deeply integrated, and China is a big buyer with large chip demand. Whichever industry China is developing, the price of which industry will rise. In other words, the United States’ extremely hegemonic restrictions on China will artificially lead to shrinking demand and falling prices in the global semiconductor industry, which violates the norms of market economy. From the collective plunge of global semiconductor stocks, it can be seen that the market has voted with its feet to express its opposition to the Biden administration’s measures.”
In response to the US government’s new restrictions on the export of chips to China, China’s Foreign Ministry spokesman Mao Ning said on the 8th that the US politicized and weaponized science and technology and trade in order to safeguard its own scientific and technological hegemony, but this could not stop China’s development, and it would only block itself and bite itself.
According to Yu Miaojie’s analysis, the semiconductor production in the United States also needs China to provide raw materials, spare parts and supporting facilities. While suppressing the chip manufacturing in China, the United States will also “lift a rock only to drop it on its own toes”, which is detrimental to the development of American chips and even has a disastrous impact on the global semiconductor industry. This is also one of the reasons why the United States does not dare to impose sanctions on China as it did on Russia. China plays an irreplaceable role in global economic and trade integration, and the United States has some scruples.
Some American think tanks commented that the new ban issued by the United States marks a “watershed” moment in the scientific and technological war between the United States and China on semiconductor chip technology.
Yu Miaojie said that the United States considers the semiconductor industry to be a key industry competing with China. In order to seek its own development, it does not hesitate to expand the scope of control, hoping to decouple from China in the semiconductor chip industry. Previously, the United States hoped to bring China into the world economic and trade system. However, with the continuous development of China’s economy, science and technology, and its escalation in the value chain, it is regarded as a challenge to the monopoly position of the United States, and it is hit by the use of administrative power by the U S. “This means that the U.S. economic and trade policy towards China has fundamentally changed in a bad direction.”
It is worth noting that in the new regulations of the United States, in addition to prohibiting American companies from exporting advanced chips or technologies to China, there are many provisions to prevent foreign companies from selling advanced chips or manufacturing tools to China. According to US media reports, just one day before the US announced the new measures, senior US government officials admitted in a briefing that the US had not obtained any guarantee from its allies to implement similar measures.
After the United States announced the new control measures, only Taiwan Province quickly stated on Oct. 8 that it would abide by the control measures of Biden’s administration. There is no clear support in other chip producing areas. In this regard, Yu Miaojie pointed out that the best choice is not to join the US, but to share the dividends of China’s economy and super-large market by opening up its technology and market to China, whether from the perspective of countries or regions or enterprises and industries, and for the sake of maximizing its own interests.
(Hong Kong China News Agency reporter Wang Fengling)
Original link: http://www.hkcna.hk/docDetail.jsp?channel=4661&id=100187893