Illustration: Chen Xia/GT

Washington's "small yard and high fence" strategy appears increasingly unsustainable, as the growing rift between the US government's containment policy and the interests of American tech businesses has become public and irreconcilable.

The Information Technology Industry Council, representing companies like Amazon, Microsoft and Meta, on Tuesday urged the Biden administration to refrain from issuing a last-minute rule titled "Export Control Framework for Artificial Intelligence Diffusion" that would control global access to artificial intelligence (AI) chips, warning the restrictions would jeopardize US leadership in AI, Reuters reported.

The Semiconductor Industry Association issued a statement on Monday night, saying that "This potential regulatory action is anticipated to place global restrictions and impose onerous licensing requirements on US exports of advanced integrated circuits."

While the rule has not yet been introduced, several media outlets described it as a further escalation of US chip restrictions on China.

The fact that US tech companies have become increasingly blunt in expressing their criticism and concerns regarding Washington's policy direction undoubtedly indicates a widening divide between them and the US government's strategy of maintaining its global technological supremacy by restricting the export of high technology products.

For American tech companies, the pursuit of profit maximization is the fundamental principle of their survival and growth. And the vast consumer base and increasingly mature industrial ecosystem in the Chinese market provide ample development space and substantial returns for those American companies. 

Excluding the Chinese market from their potential customer list not only means a significant loss of business opportunities but may also trigger a restructuring of supply chains and changes in market dynamics, which goes against their interests.

The US government has publicly viewed China as a strategic competitor, seeking to curb China's development in high-end technology by means like restricting AI chip exports. However, this strategy overlooks the complexities of global industrial and supply chains, as well as the rapid pace of technological innovation and market demand. By limiting AI chip exports, the US not only risks undermining the revenue streams of American tech companies but may also prompt other countries and regions to expedite their own research and development efforts.

With the industry's prospects under such a threat, no wonder Ken Glueck, executive vice president at Oracle, said on Sunday in a blog post on the company's website that the Biden administration's rule "will go down as one of the most destructive to ever hit the US technology industry."

The rift over the US technology blockade has existed from the outset, which has gradually become more public and pronounced as Washington intensified its technology suppression and markets evolved. 

The display of industry opposition shows that US tech companies apparently have sensed the potential danger, which has become so significant that they have to unite to express their opposition. 

In this context, the space for the US to decouple from China in high-end technology is becoming increasingly constrained. Although Washington is unlikely to alter its established policies due to political considerations, substantial pressure from the business community will pose significant challenges and difficulties to the implementation of these policies.

In the meantime, what China needs to do is to steadfastly focus on its own issues, concentrating efforts on the continuous enhancement in its technological strength. In the face of external challenges, Chinese tech companies have instead demonstrated resilience and an unwavering spirit of progress. In the realm of high-end technology, especially the application of cutting-edge technologies like AI, Chinese companies have shown extraordinary vitality and momentum.

Moreover, China has always adopted an open approach, actively fostering global cooperation and sharing the benefits of its technological advancements with countries and regions worldwide. This collaborative effort not only contributes to the building of a more open, inclusive and mutually beneficial global tech ecosystem but also underscores the narrowness and shortsightedness of the US "small yard and high fence" strategy.