Why is China fighting so hard against the US’ new chip ban – and will it work?

China’s escalating protests against new US restrictions targeting Chinese-made microchips are a sign of Beijing’s determination not to cede any more ground in its stand-off with Washington over a basket of tech and trade issues, analysts said.

The United States last week announced a global ban on the use of advanced artificial intelligence-powered chips made by Chinese companies – the latest in a string of export curbs targeting China’s semiconductor industry.

But unlike previous cases, where Beijing often reacted with relative restraint, Chinese authorities have threatened to punish any organisations or individuals who enforce Washington’s new ban using an anti-sanctions law.

The fact that Washington had announced the new policy while the two sides are midway through a 90-day truce in the trade war had “obviously” not been well received by Beijing, and that may partly explain its strong reaction, analysts told the Post.

The move also reflects China’s growing confidence in its ability to go toe-to-toe with Washington over trade and technology issues, with Beijing likely aiming to force Washington to “at least back down” over the chip rules, they added.

“China’s stronger retaliation post-Liberation Day may have been to prevent the ‘give them an inch and they’ll take a mile’ style of development from continuing,” said Lynn Song, chief Greater China economist at investment bank ING, referring to the day US President Donald Trump launched his so-called “reciprocal” tariffs, on April 2.

South China Morning Post