Do US sanctions against China threaten tech innovation?


One would have thought (wrongly) that the change of administration in the United States would cause a drop in trade tensions with China – whose tech sector is burdened by the sanctions decreed under Trump. However, this is not the case; and the Joe Biden administration has even recently added very restrictive new measures for the Chinese tech sector.

It must be said that the international context is tense against a background of desire for hegemony, the sound of boots in eastern Europe, and a real risk of conflict involving China and the United States around Taiwan. A conflict that no longer seems truly virtual, especially since Xi Jinping’s speech at the opening ceremony of the 20th Congress of the Chinese Communist Party.

This Chinese startup is one of the first victims of the new sanctions decreed by Biden

The president notably reiterated 8 days ago that the country reserves the right to “take all necessary measures” versus “any interference by external forces”. All this with a particularly strong speech around China’s determination to move towards a “reunification” from mainland China with the island of Formosa – which Beijing considers part of its territory. From then on, we understand that the United States no longer wants the most advanced American technologies to contribute to the Chinese tech sector.

And obviously when the Department of Commerce decrees that foreign firms no longer have the right to use technologies designed from American patents, the effect is felt quickly, and rather harshly. TSMC, the coveted Taiwanese foundry that manufactures Apple Silicon chips, Nvidia, Qualcomm, MediaTek and many other industry leaders announces the suspension of the production of a high-powered graphics chip ordered by the Chinese start-up Biren Technlology.

The chip in question, based on American technologies, promised even more muscular performance than Nvidia’s A100 GPU, the export of which to China is now prohibited for fear that this computing power will be used by the Chinese army to develop weapons. and new surveillance technologies. In September, the United States indeed ordered Nvidia to no longer ship A100 chips to China “in order to address the risk that these products may be used or diverted for military purposes”.

According to Nvidia, the A100 chip can deliver the necessary computing power “to the most agile data centers for AI, data analytics, and high performance computing (HPE) applications”. China, for its part, speaks of “technological blockade”and stresses that from his point of view “The United States continues to abuse export controls to restrict the export of semiconductor-related items to China, which China strongly opposes”.

The whole question remains to know the impact of these export restrictions on the pace of innovation. In recent years, the flourishing activity of the Chinese tech sector has rather pulled the global tech sector upwards, but now it will be necessary to reckon with a global chain where it will be much more complicated for the Chinese tech sector to access cutting-edge technologies. .

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