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As the U.S. semiconductor industry raises concerns over export restrictions to China, administration officials reiterated that President Joe Biden's approach is not to decouple economically from the country. Instead, he is aiming to balance U.S. security and competitiveness while maintaining good working relations.
Following the Biden administration's implementation of export controls in October 2022 limiting the sale of advanced technologies to China, Chinese officials hit back. They banned U.S.-based chipmaker Micron Technology and limited the export of rare metals gallium and germanium, used for semiconductor chips and solar panels. The increasing tension between the two countries is beginning to worry U.S. companies doing business in China.
The Semiconductor Industry Association released a statement this week calling on the Biden administration to hold off on further export controls to China. Imposing further restrictions risks "diminishing the U.S. semiconductor industry's competitiveness, disrupting supply chains, causing significant market uncertainty and prompting continued escalatory retaliation by China."
The association added: "We call on both governments to ease tensions and seek solutions through dialogue, not further escalation."
Daniel KritenbrinkU.S. assistant secretary of state for East Asian and Pacific affairs
That's exactly what the administration is doing, according to officials speaking at a hearing Thursday held by the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party. Keeping communication with China open is the only way to make U.S. concerns clear, correct misconceptions and explore areas where the U.S. and China can work together going forward, said Daniel Kritenbrink, U.S. assistant secretary of state for East Asian and Pacific affairs and a witness during the hearing.
"As we compete, we are committed to managing this competition responsibly and to maintaining open lines of communication with the People's Republic of China," he said during the hearing. "Intense competition requires intense diplomacy."
Officials point to communication as key to U.S.-China relations
As an example, Kritenbrink pointed to Secretary of State Antony Blinken's visit to China last month and his emphasis on keeping open lines of communication to build U.S.-China relations.
"He made clear that while we are competing vigorously, the U.S. would responsibly manage competition so that the relationship does not veer into conflict," Kritenbrink said.
Under the Biden administration, the U.S. has added 237 Chinese entities to a list kept by the Department of Commerce's Bureau of Industry and Security (BIS) of foreign entities that it believes pose a threat to U.S. national security and require authorization before U.S. technology may be shipped to them, said Thea Rozman Kendler, assistant secretary of commerce for export administration at BIS and a witness at the hearing. The advanced technology export controls issued last October have also effectively restricted China's ability to use artificial intelligence and supercomputing power to develop its military, she said.
However, she reiterated that the U.S. is not using export controls to pursue economic decoupling from the country.
"Our approach to China is calibrated and targeted," Kendler said. "We seek to counter China's military modernization by restricting key sensitive technologies and exports to specific entities of concern without undercutting U.S. technological leadership or unduly interfering with commercial trade that doesn't undermine U.S. national security."
During the hearing, Rep. Seth Moulton (D-Mass.), a member of the committee, asked about the value of engaging in open communication with Chinese officials, which witnesses stated enables the U.S. to avoid conflict in certain situations and find ways to work together.
Yet the officials' positions on the criticality of communication with China were met with dismay by some members of the committee.
"You don't understand, [China is] the biggest bully on the planet," said Rep. Blaine Luetkemeyer (R-Mo.), a member of the committee. "They determine the rules of the playground, they determine the relationships on the playground, and as long as you're willing to play footsie around the edges, we're never going to be able to corral them."
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.