The U.S. Department of Commerce added another 36 Chinese companies to its export ban list or “entity list” in late December, 2022. The report cites national security concerns, US interests, and human rights violations as reasons for the bans.
Industries targeted by the bans include aviation, chemicals, and semiconductor chips, signaling a US effort to stifle China’s military and technological development.
Additions to the entity list constitute the latest move in a years-long escalation of hostile affairs, and bilateral cyber warfare tactics. The trend started under Trump’s presidency and continues to develop under the Biden administration.
The export ban came after several other social media and tech bans against China in late 2022. As the US negotiates with Taiwan to strategically procure control over semiconductor manufacturing, China accuses the North American superpower of politicizing trade to hamper its national interests.
A New Development In Continuously Hostile China-U.S. Relations
The U.S. Department of Commerce’ entity list restricts US companies from trading with 36 major Chinese firms. While it’s still possible for US companies to apply for purchasing licenses to buy from entity-listed companies, permission will most likely be denied.
This raises questions about state-affiliated enterprises positioning themselves at an unfair advantage to other companies wishing to compete. Other countries and US trade partners will also be required to cease trade with banned companies. Among the banned Chinese companies is Yangtze Memory Technologies, a Wuhan-based computer chip manufacturer.
According to the entity list report, Yangtze is “posing a significant risk” to national security and US foreign policy. It also allegedly supplies parts to Huawei technologies, a major Chinese tech company banned in the US for posing an “unacceptable risk.”
The ban indicates an effort to suppress China’s ability to acquire and develop advanced technologies including state-of-the-art chips and hypersonic weapons, diminishing its warfare capabilities.
While the US cites security concerns for bans, Wang Wenbin, China’s Foreign Ministry spokesperson accused the country of “stretching the concept of national security, abusing export control measures, engaging in discriminatory and unfair treatment [against competing countries],” and “politicizing economic and sci-tech issues.”
Several Chinese aviation companies also made the list, a move presumed to prevent China from acquiring knowledge and products to help them advance development of hypersonic weapons.
In early December, 2022, China filed a dispute with the World Trade Organization (WTO) for US chip export curbs. While the WTO claims dedication to safeguarding fair global trade and fighting corruption, critics have accused it of only serving “interests of multinational corporations” and “increasing inequality.”
Social Media Warfare
Despite being a Chinese app, TikTik is blocked in China. In addition, Chinese citizens can’t access western social media platforms like Facebook, Instagram, Youtube, or Twitter. As China is accused of disinformation campaigns on western citizens, it ensures similar strategies can’t be used against its own citizens.
The Battle of Semiconductors: The World’s Most Critical Technology
Semiconductor chips are a major and integral component in electronic devices. Yet, only a handful of manufacturers worldwide can produce advanced chips.
In recent years, semiconductors have become a significant geopolitical issue, especially in the context of the US-China rivalry. More than any other product, semiconductors provide the substructure for geopolitical, military, and economic power.
The Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest semiconductor manufacturer. It’s responsible for about 90% of the world’s most advanced chips. Both China and the US have exhibited motivation to absorb Taiwan’s chip manufacturing capabilities as their own.
In a diplomatic visit to Taiwan in August 2022, Nancy Pelosi, speaker of the United States House of Representatives, met with Taiwanese officials to discuss US military protection against China and cooperation on semiconductors. The visit took place in spite of military warnings from Beijing and accelerated the deterioration of relations between the two rivaling nations.
In November 2022, TSMC announced it would be moving its most advanced manufacturing to Arizona, a move that understandably enraged China. As the Biden administration progresses to amp up US chip manufacturing, China has accused them of “luring” Taiwan in exchange for security from China, who claims Taiwan as its own territory.
A New “In-House” Model of Global Supply Chains
With the US investing billions and maneuvering diplomatic relations to form a semiconductor alliance that suits its purposes, nearshoring is cited as a necessity for the stability of global and industrial supply chains. However, this also raises concerns about the future of international trade.
Conflict and distrust between the world’s two largest economies is bound to cause disruption across the board. While the US can rest easy that domestic manufacturing prevents disruptions to its semiconductor supply chain, an increase in cyberattacks will likely ensue.
While there’s no point worrying about cyberattacks on government agencies, you can take steps to protect yourself.
By practicing good digital hygiene and using a VPN, you significantly reduce the risk of being targeted. CyberGhost VPN uses military-grade 264-bit AES encrypted VPN tunnels to encrypt your connection. This protects you when you connect to public networks and limits data collection when you go online. Use CyberGhost VPN today to enhance your digital security.