Xi Jinping’s tough choices in the chip wars
I was very interested to read opposing analyses of the impact of the new U.S. policy toward the export of semiconductor and artificial intelligence technology to China — both from former Department of Defense analysts. One was from Gregory Allen, a CSIS analyst, and former Director of Strategy and Policy at the Department of Defense (DOD) Joint Artificial Intelligence Center, where he oversaw development and implementation of the DOD’s AI Strategy. The second was published by Jon Bateman at the Carnegie Endowment, a former special assistant to the Chairman of the Joint Chiefs of Staff and Director of Cyber Strategy for the DOD. Despite their similar backgrounds, they come to completely different conclusions.
Holding a harder line, Allen concludes that the Biden administration was forced to impose harsh measures. The inability to constrain China from using “dual-use” technology for military applications is a security risk, in addition to the country's ambition to sidestep export controls through illicit means whenever possible. China’s strategies must be stopped. “The U.S. is firmly focused on retaining control over ‘chokepoint’ technologies in the global semiconductor technology supply chain,” Allen wrote in a CSIS article, in order to “actively degrade China’s technological maturity below its current level.”
In a more moderate vein, Batemen thinks the new policy is a mistake. It deals a death blow to China’s semiconductor goals but could also have serious consequences for the U.S. “Although framed as a national security measure, the primary damage to China will be economic, on a scale well out of proportion to Washington’s cited military and intelligence concerns,” he noted in Foreign Policy magazine. “In sum, America’s restrictionists — zero-sum thinkers who urgently want to accelerate technological decoupling — have won the strategy debate inside the Biden administration.” He says the problems are tension with allies afraid the U.S. has gone too far with decoupling; abandonment of the rules-based order under the WTO; possible reprisals by China against U.S. allies such as Korea, Japan and Taiwan; a chilling effect on U.S.-China commerce in general due to a “volatile policy environment”; and rising global tension as the U.S. ratchets up anti-China measures.
What is not analyzed in detail is the likely economic and political response from China.
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