US CHIPS Act to impede global economic cooperation: Chinese trade organizations
Published: Aug 10, 2022 01:57 PM Updated: Aug 10, 2022 01:51 PM
Samsung Electronics' semiconductor factory in Xi'an, Northwest China's Shaanxi Province Photo: VCG

Samsung Electronics' semiconductor factory in Xi'an, Northwest China's Shaanxi Province Photo: VCG

A number of Chinese trade organizations Wednesday blasted the US' so-called CHIPS Act which was recently approved by Congress, criticizing the law as both disrupting and restricting trade and investment cooperation among businesses.

The China Council for the Promotion of International Trade (CCPIT) and China Chamber of International Commerce (CCOIC) issued a statement on Wednesday stating the US CHIPS Act ensures the US will gain unfair advantage over other countries, including China. And, the act will intensify the global geopolitical competition in the semiconductor sector and hinder global economic recovery and future technology innovations.

The CCPIT and CCOIC said they firmly oppose the US law and call on the international business community to jointly eliminate its adverse impact on business, and take strong measures to safeguard their legitimate rights and interests.

US President Joe Biden signed the bill on Tuesday which provides $52.7 billion in government subsidies for its own semiconductor production and research, Reuters reported.

However, one condition that semiconductor companies must meet to receive the US subsidies is that they must not expand their semiconductor manufacturing in China or in any other "countries of concern" for 10 years after receiving the US financial assistance, according to the Act. 

The law's discriminatory clauses are likely to forcibly change the international division of labor in the semiconductor sector, harming the interests of related companies all over the world, including Chinese and US companies, the two Chinese trade agencies said.

"It is a typical industrial subsidy, which is not in line with the WTO's non-discrimination principle. On the other hand, the US Act will harm the interest of enterprises by forcing them to adjust their global development strategies and layout," the statement said.

It is noticeable that the Act has not only prevented funding recipients from expanding semiconductor chips manufacturing in China, but also in any other "countries of concern" listed by the US government.

"This has expanded the discretion of law enforcement infinitely, an act that has a typical political color and will put business activities of enterprises in various countries under increased uncertainty," the statement said.

Chinese Foreign Ministry officials said on Wednesday that China firmly opposes the Act for its distortion of the global semiconductor supply chain and disruption of international trade.

The US CHIPS Act which includes differentiated industrial support policies and provisions disturbing normal scientific and technological cooperation between China and US has a strong geopolitical overtones and is another example of economic coercion by the US, said Wang Wenbin, Chinese Foreign Ministry Spokesperson during a regular briefing on Wednesday.

How the US grows its industry is its own business but it should not set obstacles for normal economic, trade, scientific and technological exchanges between China and the US, let alone undermine China's legitimate development rights and interests, Wang said.

Global Times