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Why is the U.S. banning semiconductor-chip exports to China? Ch= ris Miller on Washington’s new strategy to protect its military advan= tage and hobble Beijing’s.

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Circuit Breaker

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Why is the U.S= . banning semiconductor-chip exports to China? Chris Miller on Washington’s new strategy to protect its military advantage and = hobble Beijing’s.

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Chris Yang

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Last m= onth in Indonesia, the presidents of the United States and China m= et to discuss the question of Taiwan, the war in Ukraine, and the issue of = human rights in the People’s Republic. The biggest recent development= between their two countries, however, might have been something much lower= profile: In October, the U.S. Commerce Department introduced a comprehensi= ve ban on technology exports to China, including cutting-edge semiconductor= chips—the foundational components for advanced computers and other e= lectronic devices—as well as software for designing them and equipmen= t for manufacturing them. The new ban covers not only American companies bu= t any company in the world that uses American semiconductor technology. And= it forbids all U.S. citizens, residents, and green-card holders from worki= ng for Chinese chip makers. The threat to China’s high-tech industrie= s—whether in military applications, artificial intelligence, or the s= urveillance technology Beijing relies on to monitor its citizens—appe= ars so grave that Gregory Allen, of the Washington-based Center for Strateg= ic and International Studies, called the new U.S. approach to China’s= tech sector “strangling with an intent to kill.” How deadly is= this?

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=09=09=09=09=09=09Chris Miller is an assistant professor o= f international history at Tufts University’s Fletcher School of Law = and Diplomacy, and the author of the new book Chip War: The Fight for t= he World’s Most Critical Technology. In the defining great-power= competition of the early 21st century, Miller says, U.S. President Joe Bid= en has made an unusually aggressive move to halt technological progress in = China’s military by exploiting the West’s critical advantages i= n the chip sector. The strategy could end up doing real damage to China&rsq= uo;s economy over the long term; but in the meantime, it could also spur Ch= inese President Xi Jinping to create an independent Chinese production chai= n—and all the uncertainties for the U.S. that would come with it. =09=09=09=09=09=09

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——= —

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=09=09=09=09=09=09Michael Bluhm: What’s behind these= new export controls?

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=09=09=09=09=09=09Chris Miller: Over the past two decades,= the military balance between the U.S. and China has shifted dramatically i= n Beijing’s favor. Over the next decade, China is likely to continue = developing its military capabilities and shifting the balance even further&= mdash;for instance, by building more ships and airplanes than the U.S. will= . And China is likely to continue producing more military systems than the = U.S. will—and to deploy more of these systems in contested regions ac= ross Asia, above all in the Taiwan Strait<= /a>.

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=09=09=09=09=09=09All of this has been happening with the U.S. becoming inc= reasingly concerned about China’s intentions—in Taiwan and else= where in the region. Beijing’s moves in the South China Sea, in parti= cular, in recent years suggest that, where it can, it’ll use its mili= tary power to bolster its political influence and territorial control. =09=09=09=09=09=09

=09=09=09=09=09=09Now, given that the Chinese government has a standing pol= icy to establish territorial control over Taiwan, there’s been a grow= ing concern in the U.S. that the shift in the military balance between it a= nd China could destabilize the region—by opening the door for Beijing= to try to take Taiwan or otherwise transform Asia’s security landsca= pe.

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=09=09=09=09=09=09The question for the U.S. is what to do about this. One o= ption would be to give up on trying to maintain the status quo in Asia&mdas= h;but there’s a bipartisan consensus in the U.S. that this isn’= t a good idea. So the Americans have to find some way to halt the deteriora= tion of their military position relative to China’s.

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=09=09=09=09=09=09Bluhm: How does the U.S. administration = expect the export ban will address the problem?

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Miller= : Because no one expects any major increase in the U.S. defense bu= dget—to build a lot more ships, planes, and missiles, for example&mda= sh;the administration has to address the problem qualitatively, by creating= better systems than China’s.

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=09=09=09=09=09=09Because China is the manufacturing workshop of the world,= the solution can’t be in physically manufacturing better systems. Bu= t the Americans and their allies have a qualitative lead in computing and w= ith the semiconductors that make computing possible. That’s what the = U.S. administration targeting with these controls: They’re trying to = keep, and ideally grow, the U.S. advantage over China with advanced computi= ng and sensor capabilities in military systems, which already rely on a lot= of semiconductors. And they’re trying to reduce China’s access= to the advanced data centers and supercomputers used to design or train th= e AI systems deployed in military devices.

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=09=09=09=09=09=09At its simplest, the U.S. objective is to reduce China&rs= quo;s access to cutting-edge computing, to retain America’s advantage= in it, and then to deploy this advantage to military and intelligence syst= ems.

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=09=09=09=09=09=09Bluhm: You mention implications for mili= tary competition, AI, and big data. How big of a deal are these?

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=09=09=09=09=09=09Miller: It is a very big deal. The contr= ols are written so that they won’t only affect the Chinese government= or military; they’ll affect all of China. Restricting the transfer o= f certain advanced chips and chip-making equipment into the country altoget= her, these controls are going to have a real impact on civilian firms in Ch= ina that have no direct relationship with their government.

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=09=09=09=09=09=09The U.S. wrote the controls this way because they conclud= ed that their previous effort—which targeted only the transfer of equ= ipment to the Chinese military—hadn’t worked. The U.S. had no c= ontrol of chips once they entered China. So even if the chips weren’t= supposed to go to a Chinese military facility, many companies in China ope= nly advertised that they could use U.S. chips and technology for the Chines= e military.

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=09=09=09=09=09=09There will be collateral damage to Chinese tech firms. Th= ere’s no doubt about that. The U.S. administration was aware of this = in writing the new controls, but they decided it was a price worth paying f= or putting more effective limitations on the Chinese military and intellige= nce apparatus.

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Anne Nygård =09=09=09=09=09=09

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More from = Chris Miller at The Signal:

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=09=09=09=09=09=09“This is a zero-sum move. There’s no = doubt about that. The U.S. recognizes that there are zero-sum aspe= cts to U.S.-China competition. For a long time, it’s been popular to = say, We compete in certain spheres and cooperate in others. The Bi= den administration probably still embraces that framing. But if you look at= their first two years in office, they haven’t found many ways to coo= perate. They focused largely on competition. Some competition can be p= ositive—it makes everyone better off. But this competition over chips= is designed to hold China back as the U.S. moves forward. That’s not= unique; it’s standard practice among great powers in the midst of co= mpetitions like this to try to prevent their adversaries from getting acces= s to technology. But it does add to the recognition that the competition ha= s moved to a more zero-sum stage than a couple of years ago.”

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=09=09=09=09=09=09“Since 2014, President Xi and the Chinese g= overnment have been focused on finding ways to reduce China’= s reliance on imported chips and chip-making technology. Government pr= ograms have supported this at the national, provincial, and local levels. T= hey’ve made some strides, though not as many as they would have liked= . But where things stood in 2014 is largely where they stand today. China i= s heavily reliant on imported technology from countries such as the U.S., J= apan, and Taiwan, which are geopolitical competitors and adversaries. This = is not a comfortable position if you want to be a technological leader.&rdq= uo;

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=09=09=09=09=09=09“Chinese tech firms are responding in two d= ifferent ways. One way is trying to use different chips to get aro= und the controls. Some companies that used to provide the now-banned chips,= have begun to offer slightly less capable chips that are exempt from the c= ontrols. This is within the letter of the law of the controls and also the = spirit: Non-cutting-edge chips should be allowed to be sold to China. = The second way is trying to build up Chinese chip-making capacities. In rec= ent years, China has had the most success in the chip-design part of the pr= ocess. But in chip manufacturing, China remains very heavily reliant on imp= orted tools, especially from the United States. This is going to be a long-= term process; it’ll take China at least half a decade to make real pr= ogress. But Chinese corporations are increasingly going to focus on this.&r= dquo;

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The Signal explores urgent que= stions in current events around the world—to support it and for full = access:

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