China Sets Aside Chip War, Moves On With Us

He Lifeng told Raimondo that he is ready to make new positive efforts to“deepen consenand extend cooperation” between China and the US.

Besides, both nations agreed to hold a tourism summit in China in the first half of next year.

In August 2022, the Biden administration implemented its CHIPS and Science Act to boost the United States's semiconductor sector. In October, it unveiled its chip export control to prevent China from obtaininghigh-end chips and chip-making equipment.

Over the past one year, majorchipmakers, including Intel, Qualcomm and Nvidia, have said that thegovernment's chip export ban not only was hurting their income but would also push China to develop and make its own chips.

Chinese commentators said it's unlikely that the Biden administration will lift its chip ban in the short run, as many“anti-China”politicians are still calling for strengthening the curbs. They said the newly-established working group can help limit the negative impact of thecurbs on China.

“Dialogue is conducive to the management and control of differences and can help avoid conflicts and an overgeneralization of national security in economic and trade matters,” Zhang Monan, deputy director of the Institute of American and European Studies at the China Center for International Economic Exchanges (CCIEE), told China Central TV in an interview.

The new information exchange platform can help review the impact on the victimized country (China), increase transparency of export control enforcement and limit the risks at a manageable level, Zhang said. This platform is beneficial to China's industrial security over the long run, she said.

Su Xiaohui, deputy director of the Department of International and Strategic Studies at the China Institute of International Studies, said a lot of American firms are hurt by the United States's anti-China policy as they suffer from additional costs or revenue decline.

Su said by talking to China, thesefirms hope that their messages can create a bigger impact in theand eventually change Washington's decision. She said the new working group can serve this purpose.

But she warned that pressure from theCongress will continue to affect the talks between Beijing and Washington.

On August 16, Intel Inc said it had scrapped a US$5.4 billion acquisition of Tower Semiconductor, an Israeli chip manufacturer, after China failed to give a green light on the deal amid high political tensions between China and the US. (China was able to claim a place at the regulatory jurisdiction table because Intel meets the legal threshold for the amount of revenue it makes from China.)

Before cancelling the acquisition, Intel CEO Patrick Gelsinger had visited China for the matter in July but could not achieve anything.

During a meeting with Wang on Monday, Raimondo expressed concerns over the failure of Intel's deal and China's ban of Micron chips in key infrastructure over“national security” risks. At the same time, she said thewill not loosen its technology curbs against China.

“In matters of national security, there is no room to compromise or negotiate. And as you say, the vast majority of our trade and investment relationship does not involve national security concerns and in this regard, we are committed to promoting trade and investment in those areas that are in our mutual best interest,” she told Wang.

Wang told Raimondo that an overgeneralization of national security in trade matters is not conducive to normal trade and economic exchanges, and that unilateral and protectionist measures, which are inconsistent with market rules and the principle of fair competition, will only disturb the security and stability of global industrial and supply chains.

Since thehas reiterated that it has no intention to seek decoupling with China, it should translate its words into actions, he said.

Beijing described the Raimondo-Wang meeting as“rational, candid and constructive.”

Wang expressed sericoncerns overpractices including Section 301 tariffs on Chinese exports, semiconductor policies, investment restrictions, discriminatory subsidies and sanctions targeting Chinese companies.

In May, China called on the World Trade Organization (WTO) to monitor the United States's“discriminatory subsidies,” which it said may have violated the WTO's rules. It criticized thefor granting subsidies to green companies but excluding those using batteries from a“foreign entity of concern” in electric vehicles.

It also complained that theCHIPS and Science Act prohibits US-subsidized chipmakers from expanding their production lines in China for 10 years.

Raimondo maintained that thegovernment's investments in the chip and clean energy sectors are not intended to hinder China's economic progress.

“Under President Biden's leadership, theis now undertaking a period of historic investment in our infrastructure, in our people, in our manufacturing and in our supply chain,” she said .“Investment is core to his strategy and it will continue. It's intended to reduce risk in our supply chain, it is intended to strengthen our country and our infrastructure and create jobs.”

“We believe a strong Chinese economy is a good thing,” she said.“A growing Chinese economy that plays by the rules is in both of our interests. That said, we have to make sure there is a level playing field and we will at all times do what we need to do to protect our workers.”

Read:extends China chip curb waiver for allies' fabs

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