Biden Administration to Clamp Down on China’s Access to Chip Technology

WASHINGTON — The Biden administration on Friday added 31 Chinese companies, research institutions and other groups to an “unverified list” that limits their ability to obtain certain regulated U.S. technology, the first of a series of expected steps aimed at stopping shipments of chips and chip-making technology that China could employ on the battlefield.

The administration is also set to announce sweeping new limits on the sale of advanced computing chips, chip-making equipment and other products to China, people familiar with the plans said, in an effort to cripple Beijing’s ability to access critical technologies that are needed for everything from supercomputing to guiding weapons.

A number of Chinese firms are expected to face restrictions similar to the limits that the Trump administration imposed on the telecom equipment maker Huawei. Those restrictions would prevent companies anywhere in the world from sending products made with the use of American technology, machinery or software to those designated firms, the people said.

The rules are also expected to limit the sale of cutting-edge U.S.-made tools to China’s domestic semiconductor industry, as well as stop U.S.-made microchips from being sold to China’s most powerful supercomputers, they said.

The United States places companies on the unverified list when it cannot adequately rule out the risk that the firm’s products are being used for purposes that would run counter to U.S. national security. The list of 31 entities issued Friday morning included significant research institutions, like divisions of the Chinese Academy of Sciences, and Yangtze Memory Technologies Co., Ltd, a major memory chip maker from which Apple has considered sourcing some products for sale in China.

More on the Relations Between Asia and the U.S.

  • Taiwan: American officials are intensifying efforts to build a giant stockpile of weapons in Taiwan in case China blockades the island as a prelude to an attempted invasion, according to current and former officials.
  • North Korea: Pyongyang fired an intermediate range ballistic missile over Japan for the first time since 2017, when Kim Jong-un seemed intent on escalating conflict with Washington. But the international landscape has changed considerably since then.
  • A Broad Partnership: The United States and 14 Pacific Island nations signed an agreement at a summit in Washington, putting climate change, economic growth and stronger security ties at the center of an American push to counter Chinese influence.
  • South Korea: President Yoon Suk Yeol has aligned his country more closely with the United States, but there are limits to how far he can go without angering China or provoking North Korea.

In a notice on Friday morning, the Biden administration also threatened further restrictions on U.S. sales to the 31 entities if China did not cooperate in allowing the U.S. government to verify whether those goods ultimately end up being used by the Chinese military.

The measures come at a particularly sensitive moment for Beijing, and it remains to be seen whether the Chinese government will take action in response. Chinese leaders will hold a major political meeting beginning Oct. 16, where China’s president, Xi Jinping, is expected to secure a third term, becoming the country’s longest-ruling leader since Mao Zedong.

Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, said in emailed remarks Thursday that the United States was trying “to use its technological prowess as an advantage to hobble and suppress the development of emerging markets and developing countries.”

“The U.S. probably hopes that China and the rest of the developing world will forever stay at the lower end of the industrial chain,” he added.

Samm Sacks, a senior fellow at Yale Law School who studies technology policy in China, said the new rules from Washington could push Beijing to impose its own restrictions on American companies or on firms in other countries that comply with U.S. sanctions but still want to maintain operations in China.

“The question is: Would this new package cross a red line to trigger a response that we haven’t seen before?” she said. “A lot of people are anticipating it will. I think we’ll have to wait and see.”

With its vast ecosystem of factories, China continues to be a massive and lucrative market for U.S. chip exports. The tiny technologies are crucial parts of the smartphones, laptops, coffee makers, cars and other goods that Chinese factories pump out for export to the world or for purchase in China.

The Chinese government has invested heavily in building up its semiconductor industry, but it still lags behind the United States, Taiwan, Japan and South Korea in its ability to produce the most advanced chips.

Many American companies have long argued that their sales to China are an important source of revenue that allow them to reinvest in research and development and retain a competitive edge.

But doing business with China has become much more fraught in the last few years, as the tensions between the United States and China have morphed into a Cold War competition. The Chinese government has sought to blur the line between its defense sector and private industry, drawing on Chinese science and technology firms that specialize in artificial intelligence, big data, aerospace technologies, quantum computing and other fields to fuel the country’s military modernization.

Chinese military programs now use supercomputing to model nuclear blasts, guide hypersonic weapons and establish advanced networks for surveilling dissidents and minorities, among other activities.

In remarks at the White House last month, Jake Sullivan, the national security adviser, signaled that the administration was taking a new approach to technology regulation with regard to China. He said that the U.S. government’s previous approach, of trying to stay a few generations ahead of competitors in certain key technologies, was no longer sufficient.

“Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible,” he said.

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