America and China’s $574 billion chip war has already scored an ‘extraordinary success beyond anyone’s wild dreams’ for Joe Biden
Gina Raimondo wanted to stress there was no plan about "decoupling" in Beijing but abandon export controls? "No, of course not."
Last October was the starting gun in a whole new race between the U.S. and China, and this summer marked a midway point of sorts. From the vantage point of Kevin Klyman, a technology policy researcher at Harvard University, “it has gone quite well for the Biden administration in terms of getting foreign partners on board.”
He was talking, of course, about semiconductor chips, the magical tiny structures that power everything from computers to computerized cars and are becoming something like the oil of the 21st century.
President Joe Biden set the clock racing on Oct. 7 with a set of export controls that sought to restrict China’s procurement of highly advanced chips and the computers containing them. Also, they didn’t just target the cutting-edge chips but the tools that could be used to make them, such as Netherlands-based ASML’s state-of-the-art lithography machine. That’s a serious barrier preventing China from developing its own models of the most advanced chips. And America’s Dutch and Japanese allies have come on board, stunning experts like Klyman.
“It has been an extraordinary success beyond anyone's wildest dreams that the Netherlands and Japan have joined U.S. export controls to the hilt.” Klyman told Fortune. “That was not what outside analysts expected.”
This past August, Biden signed a new executive order, banning U.S. investments in three critical Chinese technology sectors: semiconductors, quantum tech, and AI. The ban, which takes effect next year, is sure to accelerate private equity and venture capital funds’ already rapid divestmentfrom the nation. Weeks later, Biden dispatched Commerce Secretary Gina Raimondo to Beijing. While it was the latest in a series of visits meant to thaw the relationship between the two superpowers, and Raimondo was at pains to say the U.S. is not pursuing an economic “decoupling” from the second-largest economy in the world, inevitably the conversation turned to chips. Raimondo told reporters that her counterpart, Chinese Commerce Minister Wang Wentao, and other officials had asked for the U.S. s “to reduce export controls on technology,” and that “Of course, I said no. We don’t negotiate on matters of national security.”
