Are America’s allies the holes in its export-control fence?
AMERICA MAKES no bones about wanting to stop China, its autocratic rival for geopolitical supremacy, from getting hold of advanced technology. Any day now the White House is expected to extend restrictions on sales to the country of advanced microchips used in training artificial-intelligence (AI) models. This is the latest set of export controls designed to prevent cutting-edge tech that America helped create, meaning most of it these days, from making its way to the Chinese mainland. It is also meant to close a loophole, which allowed Chinese firms’ foreign subsidiaries to procure chips that their parents were barred from purchasing.
The loophole is almost certainly not the last one that will need closing. Just this month America itself created room for a few more. Last year it imposed sweeping restrictions that cut off people and firms in China from many advanced technologies of American origin, including types of cutting-edge chips, software to design them and tools to manufacture them. On October 9th it granted two South Korean chipmakers, Samsung and SK Hynix, indefinite waivers to install chipmaking equipment that falls under these restrictions in their factories in China. Four days later TSMC, Taiwan’s chipmaking champion, also received a dispensation. The carve-outs were secured (and announced) by governments in Seoul and Taipei, which are keen to protect their domestic firms’ vast commercial interests in China. They also shine a light on the knotty nature of the American-led global export-control regime.
American sanctions’ global pretensions depend on the co-operation of allies. In principle, democratic governments in Asia and Europe are similarly wary of China, and devising their own export controls. In practice, their policies are not always aligned with Uncle Sam’s. The result could be a mesh of rules that, once in place, would impose costs on technology companies without doing…
2023-10-16 13:35:06
Post from www.economist.com
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