China criticizes US chip law as threat to trade

AP , Wednesday 10 Aug 2022

China on Wednesday criticized a U.S. law to encourage processor chip production in the United States and reduce reliance on Asian suppliers as a threat to trade and an attack on Chinese business.

China
In this photo provided by China s Xinhua News Agency, a People s Liberation Army member looks through binoculars during military exercises as Taiwan s frigate Lan Yang is seen at the rear on Aug. 5, 2022. AP

 

The law signed this week by President Joe Biden promises $52 billion in grants and other aid to investors in U.S. chip factories. It responds in part to warnings that supplies might be disrupted if China attacks Taiwan, which produces up to 90% of high-end chips.

The measure will ``disrupt international trade and distort global semiconductor supply chains,'' said a Foreign Ministry spokesperson, Wang Wenbin. ``China firmly opposes that.''

Parts of the law ``restrict companies' normal investment and economic and trade activities in China,'' Wang said, without giving details.

Disruption in chip supplies following the coronavirus pandemic hampered production of goods from smartphones to autos and highlighted the world's reliance on Taiwanese chips and Chinese factories that assemble most electronic devices.

The ``CHIPS and Science Act'' calls for research spending that would total about $200 billion over 10 years, according to the Congressional Budget Office.

China has spent tens of billions of dollars developing China's own chip production industry. Its factories make low-end chips for autos and other products but cannot supply high-end smartphones and other devices.

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