Who's Winning America's 'Tech War' With China? (wired.com) 74
In mid-2021 Ameria's National Security Advisor set up a new directorate focused on "advanced chips, quantum computing, and other cutting-edge tech," reports Wired. And the next year as Congress was working on boosting America's semiconductor sector, he was "closing in on a plan to cripple China's... In October 2022, the Commerce Department forged ahead with its new export controls."
So what happened next? In a phone call with President Biden this past spring, Xi Jinping warned that if the US continued trying to stall China's technological development, he would not "sit back and watch." And he hasn't. Already, China has answered the US export controls — and its corresponding deals with other countries — by imposing its own restrictions on critical minerals used to make semiconductors and by hoovering up older chips and manufacturing equipment it is still allowed to buy. For the past several quarters, in fact, China was the top customer for ASML and a number of Japanese chip companies. A robust black market for banned chips has also emerged in China. According to a recent New York Times investigation, some of the Chinese companies that have been barred from accessing American chips through US export controls have set up new corporations to evade those bans. (These companies have claimed no connection to the ones who've been banned.) This has reportedly enabled Chinese entities with ties to the military to obtain small amounts of Nvidia's high-powered chips.
Nvidia, meanwhile, has responded to the US actions by developing new China-specific chips that don't run afoul of the US controls but don't exactly thrill the Biden administration either. For the White House and Commerce Department, keeping pace with all of these workarounds has been a constant game of cat and mouse. In 2023, the US introduced the first round of updates to its export controls. This September, it released another — an announcement that was quickly followed by a similar expansion of controls by the Dutch. Some observers have speculated that the Biden administration's actions have only made China more determined to invest in its advanced tech sector.
And there's clearly some truth to that. But it's also true that China has been trying to become self-sufficient since long before Biden entered office. Since 2014, it has plowed nearly $100 billion into its domestic chip sector. "That was the world we walked into," [NSA Advisor Jake] Sullivan said. "Not the world we created through our export controls." The United States' actions, he argues, have only made accomplishing that mission that much tougher and costlier for Beijing. Intel CEO Pat Gelsinger estimated earlier this year that there's a "10-year gap" between the most powerful chips being made by Chinese chipmakers like SMIC and the ones Intel and Nvidia are working on, thanks in part to the export controls.
If the measure of Sullivan's success is how effectively the United States has constrained China's advancement, it's hard to argue with the evidence. "It's probably one of the biggest achievements of the entire Biden administration," said Martijn Rasser, managing director of Datenna, a leading intelligence firm focused on China. Rasser said the impact of the US export controls alone "will endure for decades." But if you're judging Sullivan's success by his more idealistic promises regarding the future of technology — the idea that the US can usher in an era of progress dominated by democratic values — well, that's a far tougher test. In many ways, the world, and the way advanced technologies are poised to shape it, feels more unsettled than ever.
Four years was always going to be too short for Sullivan to deliver on that promise. The question is whether whoever's sitting in Sullivan's seat next will pick up where he left off.
So what happened next? In a phone call with President Biden this past spring, Xi Jinping warned that if the US continued trying to stall China's technological development, he would not "sit back and watch." And he hasn't. Already, China has answered the US export controls — and its corresponding deals with other countries — by imposing its own restrictions on critical minerals used to make semiconductors and by hoovering up older chips and manufacturing equipment it is still allowed to buy. For the past several quarters, in fact, China was the top customer for ASML and a number of Japanese chip companies. A robust black market for banned chips has also emerged in China. According to a recent New York Times investigation, some of the Chinese companies that have been barred from accessing American chips through US export controls have set up new corporations to evade those bans. (These companies have claimed no connection to the ones who've been banned.) This has reportedly enabled Chinese entities with ties to the military to obtain small amounts of Nvidia's high-powered chips.
Nvidia, meanwhile, has responded to the US actions by developing new China-specific chips that don't run afoul of the US controls but don't exactly thrill the Biden administration either. For the White House and Commerce Department, keeping pace with all of these workarounds has been a constant game of cat and mouse. In 2023, the US introduced the first round of updates to its export controls. This September, it released another — an announcement that was quickly followed by a similar expansion of controls by the Dutch. Some observers have speculated that the Biden administration's actions have only made China more determined to invest in its advanced tech sector.
And there's clearly some truth to that. But it's also true that China has been trying to become self-sufficient since long before Biden entered office. Since 2014, it has plowed nearly $100 billion into its domestic chip sector. "That was the world we walked into," [NSA Advisor Jake] Sullivan said. "Not the world we created through our export controls." The United States' actions, he argues, have only made accomplishing that mission that much tougher and costlier for Beijing. Intel CEO Pat Gelsinger estimated earlier this year that there's a "10-year gap" between the most powerful chips being made by Chinese chipmakers like SMIC and the ones Intel and Nvidia are working on, thanks in part to the export controls.
If the measure of Sullivan's success is how effectively the United States has constrained China's advancement, it's hard to argue with the evidence. "It's probably one of the biggest achievements of the entire Biden administration," said Martijn Rasser, managing director of Datenna, a leading intelligence firm focused on China. Rasser said the impact of the US export controls alone "will endure for decades." But if you're judging Sullivan's success by his more idealistic promises regarding the future of technology — the idea that the US can usher in an era of progress dominated by democratic values — well, that's a far tougher test. In many ways, the world, and the way advanced technologies are poised to shape it, feels more unsettled than ever.
Four years was always going to be too short for Sullivan to deliver on that promise. The question is whether whoever's sitting in Sullivan's seat next will pick up where he left off.
A robust black market "emerged"? (Score:5, Funny)
I expect there's always been an especially robust black market in China.
Re: (Score:2)
True. And typical of communist sh*tholes. That was the oligarchy in the USSR. They are just laying low, waiting for the Party to collapse. So they can openly buy their mega-yachts.
Re: (Score:2)
Exactly, just like they do here in the USA.
Re:A robust black market "emerged"? (Score:5, Insightful)
Exactly, just like they do here in the USA.
Nobody in America is waiting for the system to collapse so they can buy a mega-yacht.
Re: (Score:2)
just like they do here in the USA.
I guess Larry Ellison jumped the gun.
Re:A robust black market "emerged"? (Score:4, Informative)
I expect there's always been an especially robust black market in China.
Buying semiconductors is legal in China, so it's silly to call it a "black market".
Some sales may violate American laws, but those laws don't apply in China.
Re: (Score:3)
Same reason people pirate movies. Its cheaper and easier than the legitimate channel.
Re: (Score:2)
If they are “smart and perfectly capable”, why do they need to resort to nefarious and illegal means?
China had a few bad centuries of misrule, civil war, imperial invasions, more civil war, world war, more civil war, and then several decades of totalitarian communism and famine.
So they need to catch up.
Unfortunately, they are now sliding back into misrule, along with demographic collapse.
Re: (Score:2)
Re: Stupid and futile (Score:2)
Re: (Score:2, Insightful)
What will happen if they eventually develop tech we need?
Considering that their innovation strategy depends heavily on corporate espionage, I'm comfortable knowing that we will NEVER need their technology.
Re: (Score:2)
China's economy is falling apart. They're also looking at a depopulation disaster. It's the perfect time to squeeze them.
Re: Stupid and futile (Score:1)
This. China's economy has been falling apart for 30 years, the collapse should be any moment now... while they cover Asia in high speed rail, build gleaming new cities, etc.
North Korea, probably (Score:2)
The difference between "war" and "competition" (Score:2)
In a war, you attempt to defeat your enemy by destroying their people and their assets.
In a competition, you attempt to succeed against your competitor by performing better than they do.
It sounds like Wired's headline is mislabelling the situation. OTOH if they really think it's a war rather than a competition, they should say why; AFAICT the article does not.
False dichotomy there... (Score:5, Insightful)
There aren't only 2 choices in life (black or white). And how people label the shades of gray tells you something about them and their goals.
As to your question of 'is this actually war', I think most people would view property or human 'damage' as war. Anything else could be relabeled less evocatively.
In this case it feels like trying to trip the other team early. Or destroy their bike in a triathlon, or something. Remove a tool we get to benefit from, and force them to recreate it themselves or go slowly. And since this is a difficult and expensive tool, we don't believe they can easily.
Re:The difference between "war" and "competition" (Score:4, Insightful)
I think competition implies a race where both are trying to go forward. War is more a wrestling match where the goal is to pin the opponent and prevent them from competing further. I think war is a very apt description for the shift from competing in and open market to sanctions to cripple the competition.
Frankly, this article reads like propaganda. It would be interesting to see a balanced discussion of who is winning and whether in either case the American public is coming out ahead. Its possible that China winning will mean we have cheaper and better products to buy.
Re: (Score:3)
The issue is that more and more sectors are being out-competed, and that affects jobs and in some cases national security. So like when manufacturing moved to China, now we are going to have to either see a lot of the tech sector move there, or start competing in a way that we haven't been forced to do for a very long time.
If you think back to WW2 and the follow on Cold War, the government directed a lot of R&D. The Apollo Programme is a great example, and lead to the development of a lot of technologie
Re: (Score:2)
Thousand Talents is a good example of this. China devoted a huge amount of their GDP to woo STEM people and people to set up shop and start setting up research labs and teaching.
Re: (Score:2)
They go all out, like we used to when we were at war... Except they do it for economic reasons and to improve national security by becoming more self reliant.
It's an issue with two party democracies too. Policy tends to swing wildly back and forth every 4/5 years, so it's very difficult to make long term plans that depend on any kind of government involvement. While obviously not being a democracy, at least in any form we would recognize, is not something that many in the West would advocate, it does provid
Re: (Score:2)
manufacturers decided they were going to leapfrog everyone else by skipping over high end fossil/hybrid drivetrains and going directly to EV
I don't think that is an accurate description of what happened. China apparently is also on the leading edge of PHEV technology.
BYD Unveils Plug-In Hybrid With 1,305 Miles Of Total Range [cleantechnica.com]
According to the story BYD's PHEV technology is now in its 5th generation. "The previous generation of the BYD plug-in hybrid technology offered a driving range of a few dozen kilometers on batteries alone and fuel consumption of 3.8 liters per 100 km solely on the gasoline engine. It helped boost BYD sales starting in 202
Huawei (Score:3, Interesting)
Their sanctions were supposed to kill Huawei. How well did that turn out?
It took Huawei two years but now they have their own supply network independent of the US.
Some success.
Re: (Score:2)
Yea, it's easy when your company is a wing of the federal gov't/military with state level funding and not a real company that has to turn profits to survive.
Re: (Score:2)
Sanctions certainly spurred Huawei on, but Chinese companies in general have been pushing ahead while ours make slow progress on R&D.
For example, FLIR used to be the leaders in thermal imaging. They had some interesting tech that combined visible light and IR, to overcome the low resolution of IR image sensors that made small details impossible to see. But a few years ago the Chinese released high resolution IR sensors, and at a lower cost than FLIR gear. The advantages were numerous, and the products r
Re: (Score:2)
I'm with you here. China is still innovating, while most US stuff is at a virtual standstill. Compare the Huawei three section folding phone to the iPhone which hasn't really had a major change in years [1]. Same with cars. While Ford and Chevy are still selling the same trucks with a 25% markup, China has true series hybrid SUVs for an insanely low price, where if one wanted to charge via electric, or get gas, both work.
Even on the SBC level, China's work with RISC-V is going at an insane pace, even wi
How much does this matter? (Score:5, Informative)
Re: (Score:2)
AI is an area where having the latest tech can make a big difference.
Re: (Score:2)
Indeed. These days, most things can. Essentially, China was never in any real danger here. Obviously, if you want "AI on your phone", that needs the latest chips, but that idea is bogus and stupid anyways. My prediction is that it is going to turn out to be an _advantage_ that China gets delayed on AI training, because AI does not cut it this time, and nobody will recover their investments into it. Like so many times before, really.
TSMC not NVIDIA (and not really Intel either). (Score:2, Insightful)
"Intel CEO Pat Gelsinger estimated earlier this year that there's a "10-year gap" between the most powerful chips being made by Chinese chipmakers like SMIC and the ones Intel and Nvidia are working on ..."
Who makes NVIDIA's silicon after they design it (heavily optimizing and planning for the creation process details)? It isn't NVIDIA.
And who made most of the 'chiplets' in Intel's latest CPU desktop release? It wasn't Intel. They might assemble them, but we didn't limit how well China can assemble chipl
Re: (Score:2)
China claiming Taiwan is theirs doesn't make it a fact. Stop repeating CCP propaganda.
Re: (Score:2)
Re: TSMC not NVIDIA (and not really Intel either). (Score:2)
Re: (Score:3)
Which country is physically close to and officially owns Taiwan?
Oh, I know the answer to this. It's ... Japan, which is located closer to the island of Taiwan and has exerted official control over the island more recently than the PROC.
China "owns" Taiwan in the same sense that Americans owned Hawaii in the late 1800s. Actually the Americans who staged the coup exerted more control and ownership over Hawaii than the PROC has over Taiwan, so China has yet to proceed beyond bluster to even that stage.
Re: (Score:2)
Do you need a map?
Re: (Score:2)
Do you need a map?
Yonaguni Island is 67 miles from Taiwan (the island). The Chinese mainland is roughly 100 miles away from Taiwan (the island). Of course, if we're talking the Taiwan-controlled islands just off the Chinese mainland, that's different.
Re: (Score:2)
Say in America's civil war, one side lost but refused to give up the last bit of territory/state whatever. But also refused to declare a new country claiming to be the "true America". Would the bigger America lose that territory? Why? They won the war. It's not an independent country. Why wouldn't it belong to them?
The key question is what "lost" means. For your hypothetical scenario to be closer to the China-Taiwan situation, consider that after the civil war that Jefferson Davis fled to Puerto Rico and then all European countries recognized Davis' government on Puerto Rico for over two decades. In the real US Civil War, the Confederate government and military both officially surrendered. If they had not surrendered, then they would not have "lost," and the war would have continued.
The key to winning a war is forc
Tonya Harding defense (Score:3, Insightful)
We will (Score:1)
Re: (Score:2)
In Soviet communism, the engineers were controlled by the managers, who stifled their ability. In America, there are plenty of jobs like that too, but there are also companies that treat their engineers well, and the smart engineers go to those companies, where they can produce.
Re: (Score:2)
Re: (Score:3)
Its always dangerous to believe your own propaganda. Its likely the collapse of the Soviet Union had less to do with its political and economic system than it did with the cost of maintaining an empire. The Soviet Union was the first to put a satellite in space and the first to put a person in space. I'm not sure that its failure was caused by a lack of scientific innovation.
Its important to remember that they were just as devastated as the rest of Europe by World War II but did not have the United States
Re: (Score:2)
The chinese have done an interesting take on a mishmash of capitalism/central rule.
Well, they've tried. And the capitalist part of it worked really well as long as the central rule part stayed out of the way. Too well, for Xi Jinping's taste. Because capitalism erodes central rule. He realized a few years ago that capitalism in China was threatening to create independent-minded middle and upper classes with enough collective economic power to be a threat to the party in a few years if allowed to continue developing. So he began using central rule to bring the rich back in line and to ins
Re: (Score:2)
Re: (Score:2)
Re: We will (Score:2)
Who is? (Score:1)
Not worried (Score:2)
I am not worried about China. Their entire country is a shambles just waiting to collapse from within.
Re: Not worried (Score:2)
Semiconductor free world (Score:2)
Is this new iteration of the China Containment Policy the reason why Risc-V laptops and desktop SBCs are not widely available yet?
I'm betting on China (Score:3)
Some armchair general conclusions from a quick mental analysis I did just now based on vague recollections of media headlines over the years.
First, the west pretty much gave China large chunks of its technology, as companies outsourced nearly every part of their operations and our governments were cheering. Add in what is probably a solid dose of industrial espionage on top of what can be observed directly from those operations, and China got a fantastic head start.
Second, China seems to be seriously investing in their education and tech, and ramping up. They got a billion people, and they are not afraid to incentivize them to get to work, or to invest heavily in research and education. Meanwhile in the west we are pondering why educational scores are dropping, and we are talking about maybe investing a few dollars/euros here and there.
Third, China has brilliantly understood part of the answer to the previous point; they export TikTok to the world, making our young increasingly dumb (and collecting a metric manure ton of useful data in the process) with TikTok configured in "maximum induce addiction mode", whereas domestically they have controls in place to protect their young from the madness.
Fourth, China is focused on actually moving forward, whereas in the west it is more about not having to outrun the lion you just don't need to be slowest - it is far easier to make money by stifling the competition, monopolizing your space and controlling the market, than doing actual innovation.
Some sweeping broad oversimplified generalizations there from a non expert with a solid dose of hubris in terms of his ability to understand the world. But right now I cannot see how the west would seem to be winning this in any way, and any historical advantage is fleeting. "The west" seems to be a shadow of its past - struggling to take back some outsourced operations, with a seriously fragile supply chain (e.g. look at the recent IV fluid situation in the US by just one factory dropping out), and as a military power the whole NATO is struggling to simply produce artillery shells for Ukraina's defense, with national stock levels dropping. Big western powers are talking about maybe eventually doing something with solar power, as China already did it and have eclipsed the rest of the world, having huge chunks of that investment behind them and enjoying the nearly free power.
Alright, this has officially turned into a rant, so leaving it there. Conclusion: it is time for the west to wake up (even more). But ... as the west is a fragmented ecosystem of decision makers, in which every decision is some sort of political compromise, I'm not hopeful. And now I am _actually_ going to stop ;-)
Re: I'm betting on China (Score:1)
You don't get it, do you? China, as a whole, is striving for brilliance, achievement, economic success, and better life. But they have no plans in place to increase diversity, and inclusion. They aren't taking in the world's poor immigrants and providing for them by redistributing the middle classes' assets. What a horrible, selfish place China is. China should be shunned for their selfishness.
I'm so glad to be living where diversity and inclusion and redistribution of the middle class wealth to immigr
china (Score:2)
Trade wars (Score:2)
The only successful trade war in history was "Trade Wars 2000" on the BBS circuit.
Every other has simply diminished both sides, essentially baking them both out the marketplace.
It'll be worse this time, as the Internet, along with corporate failures to scrub re-sold disks, will simply lead to a faster, more corrupt, transfer of skills to both China (who has now no reason not to use its vast wealth as leverage) and third-parties interested in screwing both nations over.
America has botched its chip manufactur
Chinese Chip-Making Is Only A Part Of The War (Score:1)
The effort to limit China's technological advancement is only one piece of a larger effort to ostracize both Russia and China economically. The US dollar is massively over-indebted, but the better-managed currencies and economies of both Russia and China are relatively debt-free. Eventually, there are going to be significant changes in world-wide capital flows investing in Russian and Chinese ventures, as well as world-wide changes in currency valuations.
Western banking interests (at the level of the Rothsc
The biggest weakness of communism (Score:2)
The biggest weakness of communism has always been corruption, IMHO the corruption in the congress, the senate and SCOTUS is greater than the corruption in the Chinese administration. So while we steer the current course the Chinese administration is more efficient.
There are a lot of other issues obviously, but everything is a trade off.