China Responds to US Controls With More Defense Firm Listings, Legacy Chip Probe
China pushed back this week against the Biden administration’s latest round of semiconductor-related export controls (see 2501130026 and 2501150040) and Entity Listings (see 2501150016), saying they risk further straining trade ties between the two countries. Beijing also added four more U.S. defense companies to its so-called unreliable entity list and said it’s reviewing whether U.S. subsidies for the American chip industry are unfairly propping up U.S. exports of legacy semiconductors.
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The Biden administration “has used the remaining term of office to intensively introduce trade restrictions on China,” a Chinese Ministry of Commerce spokesperson said Jan. 15, according to an unofficial translation. The restrictions have “seriously infringed upon the legitimate rights and interests of Chinese companies,” the spokesperson said, adding that they also threaten global supply chains.
“The Biden administration says one thing and does another. Sanctions, containment and suppression cannot stop China's progress, but will only enhance China's confidence and ability in self-reliance and scientific and technological innovation,” the spokesperson said. “China will take measures to resolutely safeguard its sovereignty, security and development interests.”
In a separate notice, the ministry announced the addition of U.S. defense firms Pacific Rim Defense, Aevex Aerospace, LKD Aerospace and Summit Technologies to its unreliable entity list for arms sales to Taiwan. The move, the second time this week China has added U.S. companies to the list (see 2501140018), blocks those firms from participating in import and export activities in China. The restrictions took effect Jan. 15.
The ministry also said it received requests from Chinese firms to begin antidumping and anti-subsidy investigations on imports of mature-node semiconductors, also known as legacy chips, from the U.S. It's specifically looking into subsidies the U.S. government has awarded to its chip industry.
China said its companies have reported that the Biden administration “has provided a large amount of subsidies to the chip industry for some time,” giving American firms “an unfair competitive advantage.” This has allowed those firms to export legacy chips to China “at low prices, damaging the legitimate rights and interests of China's domestic industry,” the ministry said. “The concerns of China's domestic industry are normal, and they have the right to apply for trade relief investigations.”
The ministry said it will review the concerns of Chinese companies “in accordance with relevant Chinese laws and regulations and WTO rules, and will initiate investigations in accordance with the law.”