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US implements tough economic sanctions against China

Experts believe that the recently announced economic sanctions by the USA against China could be as drastic as hardly any before. After all, the inevitable shortage of modern semiconductors is likely to set back the development of many industries in the People’s Republic.

Economic sanctions with historic implications

The fact that modern wars are rarely fought with weapons is made clear by the economic war between the United States and China, which has been going on for years. Now the United States has initiated what is probably the most serious sanctions package to date against the People’s Republic. After all, it focuses on one of China’s sensitive weak points – the semiconductor industry. This industry is already struggling due to China’s corona policy and general supply chain problems. Now the USA seems to want to give it the coup de grace.

The economic sanctions now imposed by the US Department of Commerce were already indicated last week. Taiwan announced that it would no longer export any high-end chips to China. Behind this is the fear that the People’s Republic increasingly wants to rely on AI-supported mobility devices. These require high-performance chips. When Taiwan announced its new economic sanctions, the U.S. was already talking about adopting new ones for its part as well. No sooner said than done. Now companies from the U.S. and so-called U.S.-related companies will be prohibited from working with China’s semiconductor industry.

Huawei sends its regards

According to the Ministry of Commerce, tighter export controls have been in effect since October 12, 2022. These, along with the other new economic sanctions, can be read in detail in the public announcement dated October 07, 2022. The fact that the U.S. prohibits national companies from cooperating with companies outside the U.S. is not new. More serious is probably the fact that US-related companies will also have the new rules imposed on them. Otherwise, there is the threat of a horrendous penalty payment. In the semiconductor industry, hardly any manufacturer can do without hardware from the United States. This means that even the world’s largest semiconductor manufacturer, TSMC from Taiwan, will no longer export chips to China in the future.

Since Taiwan produces two-thirds of the world’s semiconductors, this is a particularly hard blow for China. If you know a bit about the sanctions policy of the USA against China, the whole thing will remind you of Huawei. The Chinese company is no longer allowed to sell products in the USA due to its presumed proximity to the Chinese government. The reason given is the national security of US citizens, which is seen as being threatened by espionage using Huawei devices. The sanctions policy against Huawei reaffirmed the current U.S. President Joe Biden 2021 immediately after he took office once again.

Will China soon stand alone due to economic sanctions?

The impact on the Chinese economy is likely to be more severe than previous economic sanctions have resulted in. After all, it’s not just individual companies that are affected this time. China is a highly technical country that relies on semiconductor and chip technology. In particular, the so-called high-performance chips are considered the engine of many Chinese companies. It is not only the import ban that is likely to hurt Chinese companies. The ban on cooperation also weighs heavily. For example, many companies in China currently still rely on having their chips manufactured by TSMC in Taiwan. For this, they send designs, which then serve the chip manufacturer in Taiwan as a template for production. This could possibly lead to an unprecedented isolation of China from the global tech industry in the near future.

U.S. sees national security at risk

As with the “Huawei ban,” the U.S. is once again justifying its actions on the grounds of national security. However, the focus is not on the fear that its own population could be spied on. Rather, they are afraid of supercomputers, which open up undreamt-of possibilities for China. The government is not only monitoring the population with the help of artificial intelligence. In addition, it has become known in recent months that the Chinese military is also increasingly relying on supercomputers, which not only enable state-of-the-art military technology. It is also likely to make large-scale cyberattacks possible. This poses a major security threat from the American perspective. This probably applies to no other area on earth as much as to Taiwan. It is therefore all the more understandable that the island state is in line with the US sanctions policy.

Simon Lüthje

I am co-founder of this blog and am very interested in everything that has to do with technology, but I also like to play games. I was born in Hamburg, but now I live in Bad Segeberg.

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Experts believe that the recently announced economic sanctions by the USA against China could be as drastic as hardly any before. After all, the inevitable shortage of modern semiconductors is likely to set back the development of many industries in the People’s Republic. Economic sanctions with historic implications The fact that modern wars are rarely … (Weiterlesen...)

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