Daily Management Review

US Officials Told China To Expect Revised Export Restrictions In October – Reuters


US Officials Told China To Expect Revised Export Restrictions In October – Reuters
According to a U.S. official, the Biden administration issued a warning to Beijing about its plans to amend regulations that limit the export of AI chips and chip-making equipment to China as early as October. This was done in an effort to normalise relations between the two giants.
The Commerce Department, which is in charge of export controls, is updating the export limitations that were first announced last year. According to other sources, the update aims to close some gaps in the export limits on artificial intelligence (AI) chips and restrict access to more chipmaking equipment in accordance with recent Dutch and Japanese regulations.
"The PRC has been expecting an update around the one year anniversary, based on conversations with administration officials," the U.S. official said, using the abbreviation for People's Republic of China. The original rules were published Oct. 7, 2022.
Reuters is reporting for the first time that U.S. officials told their Chinese counterparts about the material in recent weeks, according to the official. The representative declined to provide any information about the specific conversations.
As part of a larger effort by the Biden administration to normalise relations with Beijing, the government is giving China a heads-up about the rules. The approach comes after the U.S. decision to shoot down a Chinese surveillance balloon in February drastically increased tensions.
High-ranking representatives from the Biden administration have also visited China, notably Gina Raimondo, the secretary of commerce, in August. Additionally, in September, National Security Advisor Jake Sullivan spoke with Wang Yi, China's foreign minister.
By denying China access to cutting-edge AI chips and restricting its ability to import the most advanced chipmaking equipment from the United States, the limitations announced in October 2018 sought to prohibit the use of U.S. technology to bolster the Chinese military.
The Department of Commerce declined to respond, and when questioned about the warning, a spokeswoman for the Chinese embassy in Washington stated that she had "nothing to offer."
"China firmly opposes the U.S.'s overstretching of the national security concept and abuse of export control measures to wantonly hobble Chinese enterprises," said spokesperson Liu Pengyu.
Peter Harrell, a former official in the White House, emphasised that he was unsure whether the administration had informed China of the new regulations, but that if it had, it would mark "a bit of an inflection point" for the administration as it strives to avoid sending the wrong signals.
Chinese authorities were also forewarned by Treasury Secretary Janet Yellen in July about limits on American investment in China that were announced in August.
The date of the impending export guidelines' announcement has also been impacted by the Biden administration's efforts to secure Chinese President Xi Jinping's attendance at the APEC conference in San Francisco in November.
According to reports, officials have tried to avoid making them public in the days before the summit because they believed that doing so may jeopardise Xi's attendance. To avoid upsetting China, they said, any guidelines not ready for publishing by early October would likely be postponed until after the conference.
“The Administration narrowed in on or near the one-year anniversary for a number of reasons – including to establish a clear cadence,” the official said.
But, the official continued, technological work was still needed to finish the limits. Final plans are not in place at this time, the official stated on Friday.
After Xi skipped the G20 summit in India last month, Biden and Xi have not personally interacted since the G20 summit on the Indonesian resort island of Bali in November of last year.
Early this year, the top three chipmaking nations in the world—the United States, the Netherlands, and Japan—agreed to work together.
Because its systems involve U.S. parts and components, ASML, the world's top chip equipment manufacturer and the largest firm in the Netherlands, might be impacted by the future U.S. laws, as Reuters exclusively reported in June.
There were no comments on the issue available from ASML.
The United States frequently modifies plans before passing rules, thus the limitations, including the timing, could change.