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The US “Chip War” Takes Aim at all of China

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Few people understand what the US chips sanctions are really about.

This is war!

The US has declared itself at war with China. That is reported in an article in the New York Times (NYT) on 12 July 2023 under the all-revealing title “An Act of War.” 

Last October, the United States Bureau of Industry and Security issued a document that — underneath its 139 pages of dense bureaucratic jargon and minute technical detail — amounted to a declaration of economic war on China. The magnitude of the act was made all the more remarkable by the relative obscurity of its source. One of 13 bureaus within the Department of Commerce, the smallest federal department by funding, B.I.S. is tiny: Its budget for 2022 was just over $140 million, about one-eighth the cost of a single Patriot air-defense missile battery. The bureau employs approximately 350 agents and officers, who collectively monitor trillions of dollars’ worth of transactions taking place all around the world. –Alex Palmer, NYT

Fight China to the Death

This is a war of life and death for the US.

The future of chips was life or death for China.

There were a few seconds of silence before Rozman Kendler answered, in a quiet voice. “It’s probably life or death for us too,” she said.

That is the way US officials in the trade department themselves see the chip war against China. This is about life and death – destroy China or be destroyed. 

You can easily figure out why US officials sees the chips war against China as a war on life and death: It’s because their politicians tell them that it is ! It doesn’t matter what Blinken officially tells China. It doesn’t matter what Yellen tells China. It doesn’t matter what Biden says about “working together”. What matters is what the US leaders think themselves, what they do, and what they tell their public servants. US leaders see themselves at war to destroy China and tell their officials that is it so.

Anyone who doesn’t understand that the US has started a lethal war for the destruction of China doesn’t understand the leading dynamics of international politics today.

Destroy All of China’s Economy, Science, and Development

The US chip war takes aim at all of China.

We said there are key tech areas that China should not advance in,” says Emily Kilcrease, a senior fellow at the Center for a New American Security and a former U.S. trade official. “And those happen to be the areas that will power future economic growth and development”.

“The person with the best supercomputer can do the best science.”

All the US talk about chip restrictions being a “small yard with a high fence” is a lie. 

The US wants nothing less than to cripple and destroy all of China’s economy and development.

Handicap China for a Generation

The chips sanctions are not just about limiting China’s military-industrial potential. It is taking aim a ALL of China’s society. The idea is that AI is about to permeate everything in society, science, diplomacy, politics, economics, trade, finance, military – you name. A country deprived of access to AI will be handicapped. AI needs advanced chips. The chips embargo are the means to secure that all of China will be handicapped.

And the US objective is to handicap all of China for a generation.

With the Oct. 7 export controls, the United States government announced its intent to cripple China’s ability to produce, or even purchase, the highest-end chips. The logic of the measure was straightforward: Advanced chips, and the supercomputers and A.I. systems they power, enable the production of new weapons and surveillance apparatuses. In their reach and meaning, however, the measures could hardly have been more sweeping, taking aim at a target far broader than the Chinese security state. “The key here is to understand that the U.S. wanted to impact China’s A.I. industry,” says Gregory C. Allen, director of the Wadhwani Center for A.I. and Advanced Technologies at the Center for Strategic and International Studies in Washington. “The semiconductor stuff is the means to that end.”

If the controls are successful, they could handicap China for a generation.

I wonder if China (or Russia) understand the power and functionality of the chip war.

Push China to Go Backwards

The power of chips technology doubles every 2 years. When China is cut-off from doubling the power of their chips every second year, China will fall backwards. Fast.

But that is not enough for the US war against China.

The US wants to actively reduce even the IT technology which China already has access to. 

By squeezing on the industry’s natural choke points, the Biden administration aims to block China from the future of chip technology.

Not only are we not going to allow China to progress any further technologically, we are going to actively reverse their current state of the art.

We currently see the implementation of US pushing China back even from the IT technology they currently have access to. Recently, the US coerced the Netherlands and their company ASML to band China even from DUV chip-making lithography machines. DUV is the previous technology before the current one which is EUV. The US also coerced Taiwan and their company TSMC to not produce chips for China which are fully designed by China with its existing capabilities. The leading US chip developer NVIDIA developed a downgraded “China-version” of the A100 chip, the H100 version. NVIDIA had an agreement with the US government that they could do so. But the US government just changed its mind and has now banned NVIDIA from even exporting the downgraded H100 version of their chip. The US is also banning China from access to US cloud computing centers.

The US goes against China with maximum destruction.

US Repeats Cold War Victory Strategy

The US has a deep understanding of the technology game – and a lot of experience in how to use it to cripple a big adversary, the Soviet Union.

During the height of the Cold War, when export controls to the Soviet bloc were at their strictest, B.I.S. was a critical hub in the Western defenses, processing up to 100,000 export licenses annually.

The US rules in the first Cold War were called COCOM. They banned the Soviet Union from access to chips and computers – and it worked marvelously. The Soviet Union fell completely behind in chips and computing, and never caught up. 

Why did the Soviet Union break down? Lack of economic progress and disappointed popular expectations. But how did that happen? One of the big reasons was lack of computing technology. As the Soviet Union never participated in the computer revolution, it was simply incapable of delivering the gains in productivity, living standards, military technology needed to keep up with the USA. The result was an economy and society which fossilized and eventually fell apart from within.

That is the path the US has set China upon now.

And China does nothing about it.

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Karsten Riise is a Master of Science (Econ) from Copenhagen Business School and has a university degree in Spanish Culture and Languages from Copenhagen University. He is the former Senior Vice President Chief Financial Officer (CFO) of Mercedes-Benz in Denmark and Sweden.

He is a regular contributor to Global Research.

Featured image is from InfoBrics