Two Chinese trade associations have slammed the recently passed CHIPS Act that will provide billions of dollars in funding to help the United States compete with China in technology development.
The China Council for the Promotion of International Trade and the China Chamber of International Commerce released a press statement condemning the Biden-signed piece of legislation, arguing that it will intensify semiconductor-related competition between the two countries, hinder economic recovery, and diminish innovation between the two countries.
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“On the one hand, [CHIPS] is a typical industry-specific subsidy, which does not conform to the non-discrimination principle of the World Trade Organization. On the other hand, the bill identifies particular countries as key targets, which leads companies to be forced to adjust their global development strategies and layouts,” the two associations argued in a statement released to the Chinese Communist Party-affiliated China Daily.
The CHIPS Act includes a section that would prevent funding from going to companies that are expanding semiconductor manufacturing in “countries of concern” as defined by the State Department, such as China or Iran. The bill gives a broad definition of “country of concern,” according to the two trade groups. They claim that this would expand the U.S.’s ability to enforce laws related to the legislation and limit the ability of other companies and countries to compete. That is why the two organizations are calling on businesses worldwide to work together to counter the effects of the CHIPS Act.
The council and chamber are not the first Chinese organizations to attack the CHIPS Act. The Chinese Ministry of Commerce said in a July 30 statement that the semiconductor funding would disrupt the global semiconductor industry and harm international trade.
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President Joe Biden signed the CHIPS Act into law on Tuesday, sending hundreds of billions of dollars into the semiconductor and innovation industry to challenge China’s technological prowess. “Today, I’m signing into law the CHIPS and Science Act, a once-in-a-generation investment in America itself, a law that the American people can be proud of,” Biden said during the signing ceremony.
Semiconductors are crucial for constructing electronics, but factories have struggled to keep up with market demand. The CHIPS Act would provide $52 billion to semiconductor factories and billions more to fund innovation, research, and technological developments in the U.S.
