GT Voice: EU official ignorant in backing US’ chip crackdown on China
Published: Jan 29, 2023 10:03 PM
Photo: VCG

Photo: VCG

Thierry Breton, the EU's internal-market commissioner, said on Friday that the US had the bloc's "full" commitment to the goal of "choking" China's semiconductor industry, the South China Morning Post reported. "We fully agree with the objective of depriving China of the most advanced chips as we cannot allow China to access the most advanced technologies," he said.

How arrogant and ignorant! Putting aside how such remarks are demonstrably wrong from an economic perspective in that they are detrimental to many EU firms' businesses, what makes EU officials like Breton to think that they can "choke" any Chinese industry at will? We have to make one thing crystal clear: China's development has never and will never rely on charity from any country or region.  

At a time when the EU itself needs to revive its own industries amid a confluence of challenges, including the US' protectionist policies that basically try to force EU and other firms to expand in the US, it is quite laughable that an EU official in charge of "internal market" makes such frivolous remarks in an apparent attempt to express twisted "commitment" to the US' toxic "decoupling" policies. 

This kind of rhetoric pushing the EU to side with the US in the latter's attempt to crack down on China's rise just to maintain its own technological hegemony does not serve the EU's interests in any way, unless the EU can actually give up its own internal market and merge with the US. It will only push the EU further down the wrong path and suffocate its own industrial development potential.

It should be noted that while the EU may hold advantages in some specific areas in the semiconductor industrial chain, such as chip-making equipment and design of certain electronic components, sensors and microcontrollers, the region's overall share in global semiconductor market is 10 percent and cannot be self-sufficient in many chips required for downstream manufacturing industries. In terms of the global semiconductor supply chains, the EU has a 23 percent share in equipment manufacturing, a 14 percent share in raw materials and silicon wafers, and an 8 percent share in chip design, according to media reports. 

In order to strengthen its supply chain security, the EU is expected to pass the EU Chips Act later this year, with the view of doubling the EU market share in semiconductors from 10 percent to at least 20 percent by 2030. The EU's eagerness to bolster its own semiconductor industry is natural, after the Biden administration signed into law the CHIPS and Science Act to boost the strategically important sector within the US border. 

But that doesn't mean the EU should handcuff itself to the US in the latter's attempt to "decouple and break supply chains." Helping the US dismantle the existing global chip supply chain can hardly help the EU advance its own development plans. For anyone with the slightest knowledge of the global semiconductor industry, development of the industry cannot deviate from efficient global division of labor and a vast consumption market that supports crucial research and development. 

Against the backdrop that various economies and companies are funneling huge sums of investment into semiconductor manufacturing, materials and research, there are already lots of challenges and difficulties that can be expected for the EU when it comes to bolster its position in the strategically important industry. At this juncture, the EU cannot afford making any wrong choice or it will cost its development potential. 

If some in the EU still believe following the US is the right choice, they need to explain to their businesses and constituents why they should accept the high price for cooperating with the US in its containment on China's high-tech development. Why would they want to "decouple" from a country that takes an important position in global supply chains and has massive consumption capacity and that could alleviate much of the bloc's economic pressure? Why would they want to deprive their companies of more opportunities to survive the global economic downturn? Why would they "choke" the development of a country that offers huge opportunities to businesses from the EU and other parts the world?

When it comes to high-tech issues, ideological rhetoric may pander to some anti-China forces in the EU in the short term, but in the long run, it hurts the EU's fundamental interests. China has always shown great sincerity in its cooperation with the EU, with the willingness to provide more opportunities to strengthen bilateral ties in the economic and high-tech field. And with China's continuous opening-up efforts, the Chinese market is expected to be more open to EU companies. These are predictable collaborations that will benefit both sides. If the EU thinks these are something it can easily give up, it needs to be reminded that it won't get compensated what it has lost with China from the US.