US enforces export controls to restrict China's chip supply for hi-tech military applications

In an effort to limit China's ability to purchase and produce advanced electronics with military applications, the United States announced a sweeping set of export controls on Friday. The move, which can escalate tensions between the two nations, cuts off China from purchasing certain semiconductor chips.

AFP reports that the move will complicate Beijing's push to further its semiconductor industry and comes ahead of a major party congress in China which may mark President Xi Jinping securing a historic third term.

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The slew of measures may represent the biggest change in American policy regarding the export of technology to China since the 1990s, reports Reuters. If successful, these might cripple China's chip manufacturing sector by requiring American and international businesses that use US technology to sever ties with some of the country's top manufacturers and chip designers.

Senior government officials, according to Reuters, acknowledged that while talks with allied countries are ongoing, they have not yet obtained any guarantees that they will take similar action.

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"We recognize that the unilateral controls we're putting into place will lose effectiveness over time if other countries don't join us," said one official, adding, "We risk harming US technology leadership if foreign competitors are not subject to similar controls."

In a statement, commerce department official Alan Estevez said that the move aims to prevent 'sensitive technologies with military applications' from being acquired by China's military, intelligence and security services.

The measures, according to Jim Lewis, a technology and cybersecurity expert at the Center for Strategic and International Studies (CSIS), a Washington, DC-based think tank, are similar to the strict laws at the height of the Cold War and "will set the Chinese back years."

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"China isn't going to give up on chipmaking ... but this will really slow them (down)."

As the two nations battle for technology dominance, the manufacture and export of semiconductors have been a subject of contention between them.

Shares of manufacturers of equipment for the semiconductor industry fell as businesses throughout the world started to wrestle with the recent US action.

Semiconductor Industry Association said it was studying the new regulations and urged the US to "implement the rules in a targeted way - and in collaboration with international partners - to help level the playing field."

(With inputs from agencies)

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