China claims US law on semiconductors will hamper international trade, global supply chain

China slammed the recently amended US chip law that the Biden administration dubbed to support the local producers of semiconductors. Speaking at a press conference on Wednesday, the Chinese Foreign Ministry spokesman Wang Wenbin noted that the new Chips and Science Act will disrupt global supply chains and hamper international trade. He believed that the Biden administration deliberately passed the law violating international trade norms. He was pointing fingers at the US' intention to discourage long-term investment, trade and economic activities that the companies have been doing with China.

The critical remarks from Beijing came as US President Joe Biden recently signed into law the USD 52.7 billion Act to support US semiconductor producers and boost their positions in competition with Beijing. "The United States stated that the act aims to increase the competitiveness of US technologies and the semiconductor production, however, this act provides huge subsidies to US enterprises producing chips and introduces a differentiated policy of industry support, some provisions of which, among other things, restrict the normal investment and trade and economic activities of relevant Chinese enterprises, as well as normal scientific and technical cooperation between China and the US," Wang said at a briefing.

Further, he stressed that the main intention of the Biden administration was to disrupt global supply and damage Chinese economic activities. He underscored that Washington is free to choose its methods of development but added it must respect the rules and principles set by the World Trade Organisation. "The US should not harm China's development and must respect World Trade Organization rules and principles of transparency and non-discrimination, as well as safeguard global production and supply chains," Wang said.

Biden hails the US chip law

On the other hand, the backers of the law in the Biden administration believed that the decree would ensure an uninterrupted supply of semiconductors that power automobiles, computers, and other appliances in the United States. Also, with the advancement of technology, lethal weapon manufacturers are also using semiconductors for better and more precise impacts.  "For decades, some ‘experts’ said we needed to give up on manufacturing in America. I never believed that. Manufacturing jobs are back. Thanks to this bill, we are going to have even more of them," Biden noted during a discussion last month. 

US trying to grab the gap: Experts 

Notably, for decades, China has been vanquishing other nations in the semiconductor market as the major chip manufacturer. Intel, a major chip manufacturer, earns a major chunk of its entire annual revenue from industries it has established in Chinese industrial zones. Besides, cheap labour costs and China's "friendly" ties with other nations pushed its market on the track of gaining more and more profit. However, the COVID-19 pandemic and back-to-back lockdown hindered the supply chain and hence the prices of semiconductors witnessed a record high globally. Some companies were even forced to shut down their businesses in China, citing Beijing's zero-COVID policy. Apprehending the opportunity, the US, with this law, is trying to lure companies to invest in Washington. Moreover, experts noted that the Biden administration is trying to contain the soaring inflation and unemployment in the country. 

Image: AP