The Chinese Communist Party has taken a leaf out of US’ playbook that it has been using against China and other countries that don’t align with its worldview. In a move that escalates tensions between China and the United States, the Chinese government issued a statement on Sunday advising makers of sensitive computer equipment to refrain from purchasing products from Micron Technology Inc., the largest memory chipmaker in the US.
According to the Cyberspace Administration of China, Micron products are said to have “serious network security risks” that can endanger China’s information infrastructure and pose threats to national security. However, no specific details were provided in the agency’s brief statement.
A retaliatory move
The agency explicitly called on operators of critical information infrastructure in China to cease buying products from Micron. This development comes at a time when the United States, Europe, and Japan are imposing restrictions on Chinese access to advanced chipmaking and other technologies due to concerns about their potential use in military applications.
These actions coincide with heightened tensions between China and its neighbours, as the Chinese government has expressed aggression towards Japan and threatened military action against Taiwan under President Xi Jinping’s leadership.
Chinese officials have expressed warnings of potential consequences in response to the restrictions imposed on Chinese access to advanced technologies. However, they seem to be struggling to find ways to retaliate without negatively impacting China’s smartphone producers and other industries, as well as its efforts to develop its own processor chip suppliers.
How China zeroed in on Micron
China initiated an official review of Micron under its stringent information security laws shortly after Japan joined the United States in imposing restrictions on Chinese access to chipmaking technology for security reasons.
Also read: China fights back against US, launches cybersecurity review into memory chip maker Micron
Foreign companies have been unsettled by recent police raids on consulting firms and due diligence firms in China. While Chinese authorities have not provided explanations for these raids, they have emphasized that foreign companies are required to comply with the law.
Business groups and the U.S. government have called for clarity on the newly expanded legal restrictions on information and how they will be enforced.
The announcement made on Sunday by the cyberspace agency appears to be an attempt to reassure foreign companies. It states that China is committed to high-level opening up to the outside world and welcomes enterprises and various products and services from different countries, as long as they comply with Chinese laws and regulations.
Despite tensions, Beijing has been cautious in its retaliation, likely to avoid disrupting Chinese industries that dominate smartphone manufacturing and other consumer electronics. These industries heavily rely on the import of over $300 billion worth of foreign chips annually.
China is building its own chip development programme
China is investing billions of dollars to accelerate chip development and reduce its dependence on foreign technology. While Chinese foundries can provide low-end chips for automobiles and home appliances, they currently lack the capability to support smartphones, artificial intelligence, and other advanced applications.
The conflict between the United States and China has raised concerns about the potential decoupling of the world, leading to separate technological spheres with incompatible standards. This could result in increased costs and slower innovation, as products from one region may not be compatible with others.
Relations between the United States and China are currently at their lowest point in decades, with disputes involving security, Hong Kong, treatment of Muslim ethnic minorities, territorial conflicts, and China’s significant trade surpluses contributing to the strained relationship.
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