via Mike Shedlock:
Trump and Biden both tried to cut off China’s supply of advanced microchips. So China is now producing its own.
Please consider New Phone Sparks Worry China Has Found a Way Around U.S. Sanctions.
As Commerce Secretary Gina Raimondo was visiting China earlier this week, a sea-green Chinese smartphone was quietly launched online.
It was no normal gadget. And its launch has sparked hushed concern in Washington that U.S. sanctions have failed to prevent China from making a key technological advance. Such a development would seem to fulfill warnings from U.S. chipmakers that sanctions wouldn’t stop China, but would spur it to redouble efforts to build alternatives to U.S. technology.
Huawei Technologies Co.’s new smartphone, the Mate 60 Pro, represents a new high-water mark in China’s technological capabilities, with an advanced chip inside that was both designed and manufactured in China despite onerous U.S. export controls intended to prevent China from making this technical jump. Those sanctions were first imposed by the Trump administration and continued under President Biden.
One person told The Washington Post that the Mate 60 Pro has a 5G chip. Speed tests posted by early buyers of the phone online suggest its performance is similar to top-of-the-line 5G phones. In July, Reuters reported Huawei’s imminent return to the 5G phone market, citing three technology research firms speaking on the condition of anonymity.
“This shows that Chinese companies like Huawei still have plenty of capability to innovate,” said Chris Miller, a professor at Tufts University and author of the book “Chip War.” “I think it will also probably intensify debate in Washington on whether restrictions are to be tightened.”
Sanction Failure
The Global Times comments “The trade war, without a doubt, has proven to be a failure. While the tech war is ongoing and the US maintains an advantage in the high-tech sector, the momentum of the Chinese people’s determination to catch up despite the pressure, and a strong sense of moral conviction, are something that the US cannot match.”
China is producing chips with a 7 nanometer process while the most advance US chips are 4 nanometers. For comparison purposes the thickness of a sheet of paper is about 100,000 nanometers.
But this advance, good enough for advanced 5-G, was not supposed to happen at all.
The US wanted to knock Huawei out of the 5G market. Now, instead of China using US chips, it is producing its own chips.
China rubbed it in US Commerce Secretary Gina Raimondo’s face by releasing the phone on her visit.
This is exactly what I predicted would happen when Trump announced the sanctions.
Technology sanctions may work for a few months or a few years, but the end result is failure. Sanctions aimed at toppling leaders don’t ever work.
In this case, the US just lost chip sales to the world’s biggest market without much to show for it.
The next US response is also easy to predict regardless of whether Trump or Biden is president. Both will double down on sanctions.
Sanction and Tariff Madness
- Question of the Day: Is Trump or Biden the Bigger Trade War Fool?
- Trump Wants a 10 Percent Tariff on Everything, It’s Really a $300 Billion Tax Hike
Also consider What Would it Take for a BRIC-Based Currency to Succeed?
I offer two definitions of success. The standard meaning will be a failure, but the BRICS+++ alliance might be very useful at avoiding US sanctions.
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