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US Imposes New Chip Export Controls on China

October 17, 2023

The U.S. Commerce Department on Tuesday tightened its export controls to keep China from acquiring advanced computer chips that it could use to help develop hypersonic missiles and artificial intelligence.

Commerce Secretary Gina Raimondo said the new controls are "intended to protect technologies that have clear national security or human rights implications."

The new controls could increase tensions between the United States, the world’s biggest economy, and No. 2 China. In recent talks over several months with high-ranking U.S. officials, Beijing had appealed for “concrete actions” from Washington to improve relations between the two countries, although U.S. officials warned that the new export rules were in the offing.

Raimondo told reporters, "The vast majority of [the sale of] semiconductors [to China] will remain unrestricted. But when we identify national security or human rights threats, we will act decisively and in concert with our allies."

The Commerce Department said the new restrictions came after consultations with U.S. chip manufacturers and conducting technological analyses.

The new controls allow the monitoring of the sale of chips that could still be used for military aims, even if they might not specifically meet the thresholds for trade limitations. The U.S. said chip exports can also be restricted to companies headquartered in Macao, a Chinese territory, or other countries under a U.S. arms embargo, to prevent them from circumventing the controls and providing chips to China.

The updated restrictions, an expansion of export controls announced last year, also make it more difficult for China to manufacture advanced chips abroad. The list of manufacturing equipment that falls under the export controls has also been expanded, among other changes to the policy.

China protested last year’s export controls, viewing the design and manufacture of high-level semiconductors as essential for its economic growth. Raimondo has said the limits on these chips are not designed to impair China's economy.

Chinese government officials are scheduled to go to San Francisco in November for the Asia-Pacific Economic Cooperation summit.

U.S. President Joe Biden has suggested he could meet on the sidelines of the summit with Chinese President Xi Jinping, though a meeting has yet to be confirmed. The two leaders met last year following the Group of 20 summit in Bali, Indonesia, shortly after the export controls were announced.



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