China warns Japan of severe retaliation over chip controls: Bloomberg
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The news: China warned Japan of severe economic retaliation if Tokyo further restricts sales and servicing of chipmaking equipment to Chinese firms, Bloomberg reported, citing unnamed sources.
Senior Chinese officials conveyed the stance in recent meetings with their Japanese counterparts, the publication said, adding that Toyota Motor privately warned Japanese officials that Beijing might cut Japan's access to critical minerals essential for automotive production if new semiconductor controls are imposed.
The numbers: The US first unveiled sweeping export controls on chip equipment and cutting-edge processors in October 2022 as part of a broader campaign to limit China’s semiconductor advancements.
Those were not fully matched by Japan and the Netherlands, and the Biden administration is now eyeing more curbs, including on high-bandwidth memory chips essential for AI and other company-specific measures.
Chinese imports of chip gear in the first seven months of 2024 hit a record of almost USD26 billion ($38.33 billion) as the nation ramped up purchases in case the US and allies introduce further blocks.
The context: The US has been pressuring Japan and the Netherlands to tighten measures curbing China’s access to advanced semiconductor technology, including restricting exports from Japan’s Tokyo Electron and Dutch supplier ASML.
Biden administration officials are confident an agreement can be reached by the end of the year, according to Bloomberg’s sources.
The timing, however, is complicated by upcoming leadership changes in both countries, as the US heads to elections in November and Japanese Prime Minister Fumio Kishida steps down this month.
The source: Bloomberg
