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Updated August 10th, 2022 at 16:36 IST

China slams US' CHIPS Act; calls it 'another example of American economic coercion'

Chinese FM slammed US' CHIPS Act, claiming that it has strong geopolitical overtones and is yet another example of American economic coercion.

Reported by: Aparna Shandilya
China
Image: AP | Image:self
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The Chinese Foreign Ministry has slammed the United States' CHIPS Act, claiming that it has strong geopolitical overtones and is yet another example of American economic coercion. According to Global Times, Wang Wenbin, Chinese Foreign Ministry Spokesperson, also stated that the US CHIPS Act contains provisions that will disrupt normal Chinese-US scientific and technological cooperation.

Wenbin said, "The US CHIPS Act, with provisions that will disrupt normal scientific and technological cooperation between China and the US, has strong geopolitical overtones and is another example of economic coercion by the US."

In a historic move to strengthen US competition with China's scientific and technological initiatives, US President Joe Biden on August 9 signed a bill providing $52.7bn in subsidies for US semiconductor manufacturers and research. The Biden administration has previously stated that the legislation, now known as the CHIPS and Science Act, is critical to national security, competing with China, and reducing the United States' reliance on Taiwan and South Korea for critical technologies.

Biden's reaction on CHIPS Act

Biden wrote on Twitter, "The CHIPS and Science Bill ensures that the United States leads the world in industries of the future, from quantum computing and artificial intelligence to vaccines for cancer and cures for HIV."

The United States Department of Commerce was yet to develop guidelines for evaluating grant applications, and it is unclear when projects will be funded. Meanwhile, US semiconductor firms have started to announce billions of dollars in investments. Following its agreement on August 8, to purchase an additional $4.2 billion worth of semiconductor chips from GlobalFoundries' New York manufacturing facility, Qualcomm has pledged to spend a total of $7.4 billion between 2022 and 2028.

According to the White House, Micron's announcement of a $40 billion investment in memory chip manufacturing will result in an increase in the US market share from 2% to 10%. In a statement on August 9, Micron stated that it expects the semiconductor bill to provide funding and that its investments will result in up to 40,000 new jobs in manufacturing and construction. 

Continuous chip scarcity has had an impact on everything from automobiles to firearms, washing machines, and video games. Thousands of cars and trucks are stranded in southeast Michigan as the chip shortage continues to affect automakers.

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Published August 10th, 2022 at 16:36 IST

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