US Limits Tech Exports to Chinese Firm for Security Reasons
On Monday, Trump administration has imposed restrictions on technology exports to a state-supported Chinese semiconductor maker, Fujian Jinhua Integrated Circuit Co. This decision had taken for the reason that Chinese competition could drive American technology out of business, leaving the military without secure sources of components.
Beijing has spent a lot to build up Jinhua and other chip makers had also put efforts to transform China into a global leader in robotics, artificial intelligence and other technology industries.
The United States, Europe and other trading partners say Beijing's tactics violate its market-opening obligations and so there is no wonder that American officials are worrying that they might erode U.S. industrial leadership.
Trump has imposed tariffs of up to 25 per cent on $250 billion of Chinese goods to make Beijing stop their plans.
A commerce department stated that Jinhua is completing "substantial production capacity" for integrated circuits, possibly using U.S. technology, which threatens the long-term economic viability of U.S. suppliers of these essential components of US military systems.
Jinhua was added to a department’s entity list and so it will require having an export license for all software, technology and commodities, the Commerce Department added. It also said that such applications "will be reviewed with a presumption of denial."
This step will reduce the ability to threaten the supply chain for essential components in our military systems, Commerce Secretary Wilbur Ross said in the statement.
The order marks the second U.S. action this year blocking technology exports to a Chinese buyer.
China's second-biggest maker of telecoms equipment, ZTE Corp. has faced severe bankruptcy this year after Washington imposed 7-year ban on US technology exports to Iran and North Korea. American authorities lifted the ban in July after ZTE paid a $1 billion fine and agreed to replace its executive team and hired U.S.-selected compliance officers.
On the other hand, Jinhua involved in a court battle with a U.S. chip maker, Micron Technology Inc., which accuses the Chinese company of stealing its technology.
Micron sued Jinhua in December in federal court in California. Jinhua sued the US company the following month in a Chinese court and obtained an order blocking sales of some Micron products.