Washington eyes tighter chip ban on China in ‘self-destructive’ move
Published: Sep 20, 2023 10:35 PM
Consumers queue up to experience the new Huawei Mate 60 Pro on September 3, 2023, in Shanghai. Photo: VCG

Consumers queue up to experience the new Huawei Mate 60 Pro on September 3, 2023, in Shanghai. Photo: VCG

Chinese telecom giant Huawei Technologies' debut of  the latest advanced smartphone series Mate 60 pro continues to generate shockwaves in the US, where radical US lawmakers are pushing to step up restrictions on chip technologies and investments, and a senior US official expressed "upset" at the launch of Huawei's latest smartphone with its own chips.

In stark contrast to US politicians' resorting to further protectionism and US media outlet's hype over competition between Huawei and Apple, Huawei executives have struck an open attitude, with founder Ren Zhengfei acknowledging that he is an "Apple fan" and that it is good to have Apple as a "teacher," even as they have harshly criticized the US government's relentless crackdowns and firmly pushed ahead with the firm's "survival" campaign. 

While it remains unclear what other restrictions the US government can impose following a litany of bans already in place, Chinese officials and experts said that more crackdowns on China's chips will not hold back China's chip development and will only enhance China's resolve and capabilities to pursue tech self-reliance. Moreover, such crackdowns will only inflict more pain on global chip industries, including US giants that have benefited handsomely from the highly globalized chip supply chain. 

US radical plans

Following Huawei's release of its Mate 60 smartphone, which is reportedly powered by advanced Kirin chips, radical anti-China lawmakers in the US Congress have repeatedly called for further restrictions. In the latest move, Mike Gallagher, chair of the US House of Representatives' so-called committee on China, is planning to meet with a semiconductor industry group to urge it to reduce investments in China's chip industry, Reuters reported on Tuesday US time, citing an unidentified source.

Gallagher, who has emerged as one of the most outspoken radical anti-China US lawmakers and has repeatedly called for restrictions and crackdowns against Chinese firms and industries, plans to urge the Semiconductor Industry Association (SIA) to tighten US bans enacted in October 2022 on sales of advanced artificial intelligence chips to China to cover less advanced chips, according to Reuters.

Under the pressure from US lawmakers, US Commerce Secretary Gina Raimondo, who recently traveled to China to stabilize bilateral trade ties, said at a hearing of the US House of Representatives that the US has no evidence that Huawei can produce advanced 7-nanometer chips at scale. However, Raimondo said that she was "upset" when Huawei released the smartphone with advanced chips, which coincided with her trip to China. The US Commerce Department has also reportedly been working to obtain more information on the chip, which they said must have been made with US technology. 

Asked about Raimondo's remarks, Mao Ning, a spokesperson for the Chinese Foreign Ministry, said at a regular press briefing that it is up to Huawei to decide when to release new phones, and she has no information about that. 

"What I can say is that we persistently oppose overstretching the concept of national security in suppressing Chinese companies. Such discriminatory and unfair practices undermine the principle of free trade and international economic and trade rules, and will also disrupt the stability of the global production and supply chain, which is not in the interests of any party," Mao said. 

"I also want to tell the US side that sanctions and curbs will not stop China's development, but will only strengthen China's resolve and capability to seek self-reliance and technological innovation," the spokesperson added.

Chinese industry analysts said that the US will likely step up restrictions and crackdowns on Chinese companies that are making solid progress in chip technologies. However, given the already harsh restrictions in place, further crackdowns will unlikely inflict much greater pain than already have, and instead could hurt US companies much more. 

"Such crackdowns by the US also hurt US companies, as they will be forced to lose Chinese clients and market share in China. With the lack of cooperation with Chinese companies in relevant industries, US companies will lose the opportunity to innovate," Liang Zhenpeng, an independent tech sector analyst, told the Global Times on Wednesday.

Openness, defiance

While Huawei has once again become a top target for US politicians' push for a tech decoupling, its executives have notably struck an open attitude toward US companies - or even competitors, even though they harshly criticize the US crackdowns and vow to bolster the company's capabilities. 

During a speech in August, which was reported by Chinese media outlets on Tuesday, Ren was asked whether he was an "Apple fan." The Huawei founder urged against being xenophobic, saying that "we often explore why Apple's products are doing well, and we can also see the gap between us and Apple. It is very happy to have a teacher, to have the opportunity to learn, and to have the opportunity to make comparisons. From this perspective, it's not an exaggeration that I am an 'Apple fan,'" according to the Securities Times. 

However, Huawei executives have also shown disdain for the US crackdowns. In the same speech in August, Ren said that US crackdowns are both pressure and motivation, noting that after four years, with the efforts of 200,000 Huawei employees, the company has "basically built our own platform, which won't necessarily run on the same base as the US platform in the future."

Separately, during a speech at the Huawei Connect 2023 on Wednesday, Huawei's rotating chairperson Meng Wanzhou said that the company is striving to build a firm foundation for China's computing power and offer the world a "second option," as part of the company's "All Intelligence" strategy. 

Chinese industry analysts said that following years of US crackdowns, Chinese companies have strengthened their own innovation capabilities, even though they also face tremendous challenges.

"Any development in China's chip industry is drawing very close attention from US politicians, who would also take relevant measures… to further suppress certain Chinese chip makers," Fu Liang, a Beijing-based tech analyst, told the Global Times on Wednesday, noting that more efforts are needed to help companies boost their capabilities to cope with the risks of US crackdowns. 

Fu said that any attempt to decouple the global supply chain will hurt all companies and industries, and that "US and Chinese enterprises will be the most hurt." He said that while US politicians are seeking to impose restrictions, US businesses are actually seeking to cooperate due to the enormous interests involved, and that such cooperation should be encouraged.