Chinese Foreign Ministry spokesperson Wang Wenbin Photo: mfa.gov.cn

China opposes US politicizing, instrumentalizing and weaponizing trade and tech issues, Chinese Foreign Ministry spokesperson Wang Wenbin said on Friday in response to reports that the Biden administration is considering tightening rules on chips to China.

According to a Reuters report, the Biden administration is considering closing a so-called loophole that gives Chinese companies access to American artificial intelligence (AI) chips through units located overseas, citing four people familiar with the matter.

Arbitrarily placing curbs or forcibly seeking decoupling to serve political agenda violates the principles of market economy and fair competition, undermines the international economic and trading order, disrupts and destabilizes global industrial and supply chains and will eventually hurt the interests of the whole world, Wang said.

"We will closely follow the developments and firmly safeguard our legitimate rights and interests," said the spokesperson.

From 5G to semiconductors and AI, the US has been expanding its crackdown on Chinese high-tech sectors in recent years.

Experts have warned that the series of moves could forfeit the future of American chipmakers. Moreover, further restricting semiconductor exports to China is, in fact, cultivating Chinese competitors to US producers, experts said, noting that AI chips are one of the first semiconductors in which Chinese developers could realize mass production.

According to estimates by Boston Consulting Group, US companies could lose 18 percent of their global market share and 37 percent of revenues if the US completely bans semiconductor companies from selling products to Chinese customers, resulting in the loss of 15,000 to 40,000 highly skilled jobs.

In August, US chipmaker Nvidia issued a fresh warning that further US export curbs on its chips to China would risk bringing about a "permanent loss" for American semiconductor firms to lead in one of the world's largest markets.

"We believe the current regulation is achieving the intended results. Given the strength of demand for our products worldwide, we do not anticipate that additional export restrictions on our data center GPUs, if adopted, would have an immediate material impact on our financial results," Nvidia CFO Colette Kress said on the company's earnings call.

The reported move from the US also comes as communications between the two world's largest economies have been increasing over recent months. Chinese experts have urged Washington to abandon its two-faced approach, and show sincerity to improve its relations with China.

There is still a long way to go to stabilize and improve relations between the world's two largest economies, and the key is to follow the three principles of mutual respect, peaceful coexistence and win-win cooperation so as to find the correct way for both sides to get along in the new era, Chinese Ambassador to the US Xie Feng said on September 28, according to a post on the website of the Chinese Embassy in the US.

Global Times