【By Liu Bai, Observers Network】U.S. politicians are resorting to the same tactics in the chip sector as before, attempting to build a high wall of technological isolation through bullying and containment.
On November 20 local time, several U.S. lawmakers and experts at a public hearing claimed that further tightening of chip export controls on China is necessary, including increasing inspection staff, plugging trade loopholes, and working with allies such as the Netherlands and Japan to curb the development of China's chip industry and prevent circumvention of controls. These people are concerned that suspending the export control measures for one year could give China enough time to find countermeasures, enhance its domestic chip industry, and ultimately undermine the U.S. technological leadership.
According to the Hong Kong English media South China Morning Post, this public hearing held by the U.S. House Committee on Foreign Affairs was themed "Export Control Loopholes: Chip Manufacturing Equipment and Its Components," advocating a series of targeted measures against China. For example, granting the U.S. Department of Commerce's Bureau of Industry and Security (BIS) the power to plug trade loopholes, while designating leading Chinese semiconductor enterprises and their U.S. subsidiaries as targets for regulation.
According to the previous agreement between China and the United States, the U.S. agreed to suspend relevant export control measures for one year. However, at the hearing, U.S. politicians believed that this temporary suspension would allow China sufficient time to find ways to circumvent the controls. In the end, China may challenge the U.S. leadership in two core areas of the U.S.-China technological competition: high-end chips and artificial intelligence.
California Democratic Representative Sidney Kamlag-Dov mentioned the news of NVIDIA selling the Blackwell series chips to Saudi Arabia the day before and accused the Trump administration of "using export control measures as a bargaining chip for negotiation compromise."
"Suspending the '50% penetration sanction' would give Chinese entities a year to study ways to circumvent the controls."
Sidney Kamlag-Dov
The report states that facing the technological encirclement from the U.S. and the West, China is steadily advancing technological breakthroughs through early import of chip manufacturing equipment and increased R&D investment at home, striving to break through the U.S. regulatory blockade.
Texas Republican Representative Michael McCaul said, "I think the 'Foreign Direct Product Rule' should be included in legislation. Moreover, for many such technologies, a country-based control model might be more appropriate than a specific entity-based control model."
The so-called "Foreign Direct Product Rule" (FDRR) refers to a mechanism where the U.S. Bureau of Industry and Security has the authority to implement export controls on goods manufactured abroad that contain U.S. technology or directly use U.S. technology.
However, McCaul also added, "My concern is that we have already missed the opportunity to control high-end chips, and the damage has already been done. China is vigorously building high-level traditional chip production capacity to resist our technological suppression."
The U.S.-China Economic and Security Review Commission released an annual report earlier this week stating that under the strong support of the government, China has risen to become the global center for basic chip manufacturing. In 2015, China's monthly chip capacity was 1.2 million wafers, which increased to 3 million wafers by 2023, a 250% increase.
The commission urged the U.S. Congress to strengthen the ability of the U.S. Bureau of Industry and Security to track the final use of controlled high-end chips and to promote the transition of the high-end chip export control framework from the traditional "sales" model to a "leasing" model.
Dean Bauer, a senior researcher at the American Innovation Foundation based in San Francisco, stated at the hearing that the U.S. can either prevent chip manufacturing equipment from entering China through diplomatic means or strengthen the enforcement of the "Foreign Direct Product Rule".
"Both of these options should be considered to fill various control loopholes as much as possible in the short term," he said.
Kevin Wolf, a partner at the law firm Akin Gump, who previously served as assistant secretary for export management at BIS, expressed support for the proposal to expand personnel to strengthen the implementation of export controls.
He confirmed at the hearing: "Currently, the implementation of overseas chip export controls mainly relies on foreign governments. However, there are only two officials currently dedicated to export control matters related to China in the United States."
Wolf also pointed out that cooperation with allies remains key to plugging trade loopholes.
Chris McGuire, a senior researcher at the Council on Foreign Relations responsible for China and emerging technologies, echoed and suggested using more diverse control methods to implement comprehensive national-level controls on China.
"We should promote a global licensing system, at least getting more countries to join this system. This way, it can ensure that relevant countries will not re-export chips to China," he said.
At present, U.S. politicians are debating "how to compete with China in the field of artificial intelligence," and chips are the central issue of this discussion.
Recently, the U.S. House Committee on China Issues, which often stirs up anti-China issues, is also causing trouble on the chip issue involving China.
The committee recently published a report claiming that China purchased $38 billion worth of equipment from five companies, including ASML, in the U.S. and its allies last year, threatening U.S. national security, and called for expanding the scope of restrictions on semiconductor manufacturing equipment.
This summer, the Trump administration allowed NVIDIA and AMD to resume selling some advanced chips to China, but this was opposed by legislators from both parties. As an exchange, these two chip companies agreed to pay 15% of the revenue from related sales to the U.S. government.
China has repeatedly stated its firm position on the U.S. malicious blockades and suppression of the semiconductor industry.
Foreign Ministry Spokesperson Lin Jian once stated that the U.S. politicizes, over-sensitizes, and instrumentalizes economic and trade and technological issues, continuously increases export controls on China, and coerces other countries to suppress China's semiconductor industry, seriously undermining international trade rules, damaging the stability of the global supply chain, and is not beneficial to any party. China has consistently strongly opposed this. Suppression and containment cannot hinder China's development, but instead will enhance China's determination and capability for independent and self-reliant scientific and technological innovation. China will closely monitor related developments and resolutely safeguard its own legitimate rights and interests. It hopes that relevant countries will firmly resist coercion and jointly maintain a fair and open international economic and trade order, truly protecting their long-term interests.
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