Russia, China should build a common semiconductor industry – Reuters

The only way to escape the pressure of US tech sanctions is to pool expertise and resources, without limits

The United States recently imposed some of the toughest semiconductor-related sanctions it has ever imposed on China. By using the “foreign direct proceeds rule, which prohibits the use of technology of American origin to the sanctioned party, even for third countries, the White House has banned the entire Chinese semiconductor industry from using chip manufacturing equipment led by the United States, with the aim of slowing the rise of chip technology. It’s the same move the US used against Huawei two years ago, but on a larger scale, and demonstrates President Joe Biden’s willingness to double down on the confrontation with Beijing, forcing him to pursue a path of autonomy in semiconductors.

US foreign policy is to actively destroy globalization in an effort to consolidate unilateral US dominance and undermine competing states. Although the United States once believed that globalization served American goals and interests, the history of American politics since Donald Trump became president has been that the mutual integration of American allies and rivals, through trade and investment, is wrong and contrary to American interests. Therefore, the United States strives to create a global political confrontation in order to maintain its critical strategic advantages and to divide the world again into respective blocs, so that it can legitimize its position through ideology.

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US targets Chinese tech sector – Reuters

While Trump only cared about China, Biden escalated this to a whole new level and unleashed a double-deal against Moscow and Beijing, heating conflict and tensions to levels never seen in the original Cold War. This means, like it or not, that China and Russia will continue to be each other’s strategic partners amid the aggression shown by the United States via NATO and the Ukraine, as well as with regard to Taiwan. While China has long been risk averse, advocated stability and strived to integrate more with the West, being cautious in its actions, the latest US moves show that whatever Beijing does, Washington will continue. to continue decoupling more and more, and the world is not going to go back to how it was. Therefore, China cannot depend on the West to achieve its economic and technological goals.

In this case, China should, regardless of Western sanctions, take a long-term perspective and recognize that deeper economic integration with Russia is a necessity, not a low priority accessory. China’s attempt to strengthen its economic relationship with the wider West has been sabotaged by the United States, which, as the above shows, is deliberately initiating a geopolitical confrontation to force its allies to comply, as is saw it with NATO and Ukraine. What happened to the Comprehensive Agreement on Investment (CAI) between China and the EU? It was undermined by the United States, which used the Xinjiang issue to launch give and take sanctions to sabotage it. What happens now to China’s attempts to better integrate with its neighbors in Southeast Asia? The United States is again trying to create tension in Taiwan to foster uncertainty and force countries to take sides.

As this happens, the United States is taking more and more steps to officially exclude China from the global semiconductor supply chain. He also did the same in Russia. As the US technology window closes, Russia and Moscow need to step up the scope of their cooperation, innovation and joint investment in semiconductors. The United States is already building a new supply chain around itself. As he imposes sanctions on Beijing, he has heavily armed dozens of semiconductor companies to build new capabilities in the United States and approved massive subsidies aimed at establishing a “America first” global chip supply chain from which rival countries are excluded. China has long invested billions in its own path to self-sufficiency, but it should not try to do so alone, or for that matter without its most critical strategic partner, who is in the same boat.

Russia and China are perfectly complementary in this endeavor. First, China has excess capital, expertise and other resources, with an increasingly educated workforce that excels in scientific fields. On the other hand, Russia has the essential natural materials needed to manufacture semiconductors. Domestically, Russia has struggled to establish a chip industry and has made limited progress since the end of the Cold War. In the face of Western sanctions and technology embargoes, Russia’s strategy should be to seek Chinese investment in its chip sector, increase the number of educational and scientific exchanges with Beijing on this issue, and strategically prioritize the necessary materials. to chip manufacturing both domestically and in trade with other countries. . This will of course be a long and difficult task, given that the priority must be to build an entirely new supply chain and fundamental technology from scratch. The United States strives to use its “bottlenecks” in key technologies to squeeze China, which means that these technologies must be recreated again or in new forms.

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The original Cold War was about two competing military and technological blocs. The United States is deliberately reshaping the world in this way, whether we like it or not. China clearly prioritizes its economic growth and development and does not want bloc confrontation. It has done well in this area, but it must no longer have any illusions about the world it lives in and must strive to pool its enormous resources, population and expertise to help other countries as well. .

The United States believes that its foreign policy can both cripple Russia and stifle China. In that case, Beijing must be prepared not to rely on rapidly evaporating Western goodwill, but to engineer new markets and opportunities and build a new coalition to retaliate against the US semiconductor strategy before it is not too late. The United States has crossed a line by cutting off an entire sector of the Chinese economy from its exports, without any provocation. If so, Beijing shouldn’t try to appease the demands of the ultra-hawks in Washington demanding its compliance with Ukraine while slamming more sanctions, and partner with Moscow. “No limits”. It must not be allowed to crumble in the face of American bullying.

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Russia, China should build a common semiconductor industry – Reuters


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