Source: Global Times    Published: 2018-10-31

The US' decision to impose export restrictions on a Chinese chipmaker has slammed by Chinese government on Tuesday, and Chinese experts said that the decision ignores basic rules and principles where international cooperation is involved.

The experts' comments followed the US Department of Commerce's decision to block Jinhua, a domestic integrated circuit manufacturer, from buying US components because the department claims it poses a "national security threat" to the US.

A statement published by the US Department of Commerce on Monday said Jinhua is nearing completion of substantial production capacity for dynamic random access memory (DRAM) integrated circuits.

But the production, "in light of likely US-origin technology," would threaten the long-term economic viability of US suppliers of these "essential components of US military systems," the statement noted.

China's Ministry of Commerce released a statement on its website late Tuesday saying that "China opposes the US' behavior of abusing the concept of national security and export control measures, as well as the US' unilateral sanctions and its interference in normal international trade cooperation between enterprises."

"China urges the US to immediately stop the wrong measures, and to promote trade cooperation for companies between the two countries," read the statement.

Chinese Foreign Ministry spokesperson Lu Kang said at a routine press conference on Tuesday that the Chinese government has always urged Chinese companies to engage in outbound investment cooperation in line with market rules and to abide by local laws and regulations.

China also requested other countries to provide fair and reasonable treatment to Chinese companies and a good investment environment, Lu said.

"We want the US to do more to benefit China-US mutual trust and cooperation, not the other way around," he noted.

Unfair action

Experts the Global Times talked to on Tuesday said that what the US had done to Jinhua is an arbitrary, unfair action.

Using a "random excuse" to restrict exports to Jinhua makes the US lose its credibility within the international community, said Xiang Ligang, chief executive of Chinese telecoms industry news site cctime.com, on fresh US protectionist moves.

"The US government's measures against Jinhua are not backed by any concrete, proven facts. If the US can randomly block business with Jinhua, it can accuse any company of threatening US national security and US companies' survival. By an extension of this logic, the US can arbitrarily impose sanctions on all Chinese companies," Xiang said, adding that this kind of behavior "seriously jeopardizes international cooperation and trade."

He also said US protectionist measures against Chinese high-tech communications companies like Jinhua and ZTE Corp show that the US wants to disrupt the pace of China's manufacturing upgrade as those companies are at the heart of the "Made in China 2025" program to develop new high-tech industries.

"The US wants to maintain its hegemony over microchips," Xiang said "It wants to strangle all potential Chinese competitors in the sector."

Xiang's stance was echoed by Wang Yanhui, secretary general of the Mobile China Alliance, who told the Global Times on Tuesday that the US ban on Jinhua is completely "groundless," because the US imposed a ban on alleged "infringement of intellectual property rights" without a court decision.

Micron Technology Inc, a US provider of semiconductor solutions, filed a suit against Jinhua, accusing Jinhua of "infringing [on] DRAM business secrets" last December.

"In fact, Jinhua's production capacity is only one-tenth of Micron or even smaller. It's far less to impose a threat to affecting the survival of Micron and let alone affecting the interests of the US military," Wang noted.

Long-term 'blockade'

Experts said that the US government's measures against Chinese high-tech companies will evolve into a long-term trend.

"US measures against Jinhua are not surprising. US President Donald Trump has ordered intense and strict restrictions on China's trade development in the high-tech sector, virtually imposing a blockade," Shi Yinhong, director of Renmin University of China's Center for American Studies, told the Global Times on Tuesday.

"I think the trade dispute might end, but US policy to restrict or even block China's high-tech trade and development will last a long time," Shi noted.

Shi said on Tuesday that if China has proof that certain Chinese companies were, indeed, framed by the US government, then we will fight it out with the US.

Xiang also said that if Jinhua is prevented from conducting business with US-based suppliers, it can still turn to South Korean suppliers.

"But it's hard to say whether they can find the appropriate solution to the US blockade," he noted.

Shi Yinhong is director of the Center for American Studies at Renmin University of China.