China says US law on semiconductors will disrupt global supply, hamper trade


China has opposed the new US chip law that aims to support the local producers of semiconductors.

Chinese Foreign Ministry spokesman Wang Wenbin said that the new Chips and Science Act adopted by the US will disrupt global supply chains and hamper international trade, reported Sputnik. Last Tuesday, US President Joe Biden signed into law the $52.7 billion Act to support US semiconductor producers and strengthen their positions in competition with China.

“The United States stated that the Act aims to increase the competitiveness of US technologies and the semiconductor production. However, it provides huge subsidies to US enterprises producing chips and introduces a differentiated policy of industry support, some provisions of which, among other things, restrict the normal investment and trade and economic activities of relevant Chinese enterprises, as well as normal scientific and technical cooperation between China and the US,” Wang said at a briefing.

The Chinese foreign ministry expects all these to “disrupt global supply chains and hinder international trade,” Wang said, adding that “China is strongly opposed to this.”

China said that the United States is “free to choose its own development methods, but those should not harm China’s development and must respect World Trade Organization rules and principles of transparency and non-discrimination, as well as safeguard global production and supply chains.”

Amid heightened cross-strait tensions between China and Taiwan, there is a shortage of semiconductor chips shortage across the world.

Moreover, after the United States invited South Korea to join its semiconductor alliance “Chip 4” to build a cooperative platform for the semiconductor supply chain, China’s worries are set to bloom as the main goal of the communist nation to reduce its dependence on other countries for chips is likely to get hampered while US-China tensions rise.

This move comes as a shock to China which has dreamt of becoming a leader in semiconductor production by 2030 and is working overtime to enhance its capabilities and production to leave the US behind, a US-based publication reported.

The US-led Chip 4 alliance includes South Korea, Japan and Taiwan. India is not a part of the alliance so far.

According to several news reports, China is moving toward achieving more self-sufficiency in semiconductors which could eventually make some buyers reliant on China for many of the basic chips now in short supply.