‘Disruption, economic coercion,’ China blasts US CHIPS Act

ANKARA / ISTANBUL

China on Wednesday launched a broadside against the US CHIPS Act calling it a “disruption” and “another example of economic coercion.”

Wang Wenbin, the spokesperson for China's Foreign Ministry, said the US CHIPS Act "will disrupt normal scientific and technological cooperation between China and the US."

"It has strong geopolitical overtones and is another example of economic coercion by the US," Wang told a news conference in Beijing.

US President Joe Biden on Tuesday signed a bill called the Chips and Science Act (CHIPS Act) that aims to invest more than $52 billion in the semiconductor industry in an effort to compete with its biggest rival China.

Biden said the act will strengthen the US national security by making the country less dependent on foreign sources of semiconductors.

Chinese trade associations also raised concerns over the US move, saying the bill will lead to “unfair competition” in the chip industry.

In a joint statement, the China Council for the Promotion of International Trade and the China Chamber of International Commerce said: "The US is using government power to forcibly change the international division of labor in the semiconductor field and harm the interests of companies from all over the world, including Chinese and American companies," the two Chinese trade associations said.

"On the one hand, it is a typical industry-specific subsidy, which does not conform to the non-discrimination principle of the World Trade Organization.

“On the other hand, the bill identifies particular countries as key targets, which leads companies to be forced to adjust their global development strategies and layouts," they said.

The two also called on the global business community to work together to eliminate the adverse impact of the act on the business community and take effective measures to safeguard their legitimate rights and interests when necessary.

According to the White House, the US produces nearly 10% of the world's semiconductor supply but it depends heavily on East Asia for 75% of global production.

"The CHIPS and Science Act will boost American semiconductor research, development, and production, ensuring US leadership in the technology that forms the foundation of everything from automobiles to household appliances to defense systems," it said.

Ahead of Wang’s briefing on the matter, China's Deputy Foreign Minister Hua Chunying likened the US move against China to a "competition" between students in a class.

"Suppose the world were a class. Just as everyone is studying hard for better grades, student A in order to stop his classmates from getting ahead, cuts the electricity in their homes, makes huge noises and keeps banging with guns on their doors and 'proudly' claims he's keeping the rules-based order," Hua said on Twitter. "Anyone likes this guy? Seriously?" she asked.