U.S. China Tensions Escalate on the Back of Issues from Taiwan to Tech Sector
- May 25, 2023
- Posted by: Quatro Strategies
- Category: Politics
The demand from U.S. Representative Gallagher, chairman of the select committee on China, that the U.S. should put trade curbs on a Chinese memory chipmaker in response to China’s ban on some products made by U.S. manufacturer Micron marks the latest escalation between the world’s two largest economies, which have been tussling over a range of issues from Taiwan to technology, drawing their allies into their rivalry and having an impact on companies and trade relations.
The U.S. has been targeting Chinese technology companies and implemented export controls on semiconductors and artificial intelligence firms, as well as a possible ban on social media app TikTok, owned by China’s ByteDance, from the U.S. market.
The U.S. says it wants to stop key technologies from reaching China’s military and has accused TikTok of being a security risk due to the user data it handles.
Memory chip maker Micron became the first U.S. technology firm to be targeted by China, which barred key infrastructure makers from buying Micron products, citing national security.
Gallagher asked the Biden administration to put trade curbs on Chinese memory chip maker Changxin Memory Technology in retaliation.
Meanwhile, a Chinese regulatory crackdown on consultancy and due diligence firms resulted in a raid on U.S. due diligence firm Mintz’s Beijing office, and the detention of five Chinese employees. China said Mintz was suspected of engaging in unlawful business. Police also later visited the Shanghai office of U.S. management consultancy Bain & Co.
Authorities also targeted Shanghai-headquartered Capvision, which runs China’s largest “expert network” group, accusing it of aiding overseas institutions to steal secrets in areas such as the military and technology. Capvision said it would abide by security rules and take the lead in ensuring the consulting industry was compliant.
Taiwan has been one of the biggest issues in recent years that soured the relations between the two countries. China has stepped up military and diplomatic pressure to force democratically governed Taiwan to accept Chinese sovereignty. Taiwan rejects China’s claims.
While the United States has long followed a policy of “strategic ambiguity” on whether it would intervene militarily to protect Taiwan in the event of a Chinese attack, Biden has said he would be willing to use force to defend it.
Washington and Beijing also clashed in February after the U.S. shot down what it suspected was a Chinese spay balloon over U.S. airspace.
The United States and the Western allies have also been concerned with greater alignment between China and Russia and Washington has accused China of considering providing weapons for Russia’s war in Ukraine.
While China has stood by Russia, resisting Western pressure to isolate it, it denies any direct involvement in Ukraine and says it wants to promote a peaceful resolution.
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