Call the roll to ＂contain China＂ and force many countries to take sides! The US ＂Chip Act＂ engages in economic coercion.

　　[Global Times correspondent in the United States Ying Chen Global Times reporter Zhao Juekun Ren Zhong] "We will invest in the United States. We will succeed in America. We will win the economic competition in the 21st century in the United States. " After US President Biden finally signed the Chip and Science Act of 2022 into law on August 9, local time, he released this ambitious tweet. While providing huge subsidies to chip manufacturers in the United States, the bill requires these companies to agree not to develop the manufacturing of precision chips in China. It is no wonder that "Nihon Keizai Shimbun" called the promulgation of this bill the warming of the US "science and technology arms race against China". China’s Foreign Ministry spokesperson Wang Wenbin rebuked the so-called "protective measures" in the law on the 10th, showing a strong geopolitical color and "another example of the United States engaging in economic coercion". Although Washington’s China hawks tried to use this bill to strike a "precise blow" to China’s chip industry, few international mainstream media predicted that the United States could win this selfish and arrogant chip war. On the 9th, the British Broadcasting Corporation (BBC) quoted Jin Keyu, a professor at the London School of Economics and Political Science, as saying that he was worried: "I imagine a world divided into two parts, half of which uses China’s information systems and infrastructure, and the other half uses American information systems and infrastructure.Obviously, there will be a huge loss of efficiency. "

　　If you want subsidies, you must "exclude China"

　　"More than 30 years ago, the United States owned 40% of the global production of chips. Since then, our economic pillar, the American manufacturing industry, has been hollowed out, and we have made chip manufacturing go overseas. " Biden said in a speech when signing the Chip and Science Act on the 9th, "Now, this law has brought the chip back to the United States."

　　Biden explicitly mentioned China many times in his speech at the bill signing ceremony. He said, "It is not surprising that the Communist Party of China (CPC) actively lobbied American companies to oppose this bill" and said that the United States "must lead the world in chip production". According to a BBC9 report on the 9th, the current supply of chips in the United States has dropped from 40% of the global supply in 1990 to only 10% of the global share.

　　The Nikkei Asian Review said on the 10th that the passage of the "boldest industry legislation in decades" in the United States marked a rare bipartisan cooperation in Washington. The New York Times commented that the Republican Party, which has always opposed the government’s high degree of intervention in business, now supports the Democratic Party bill, in addition to supporting the domestic chip industry in the United States, "to contain the chip industry in China".

　　According to the Wall Street Journal reported on the 10th, the bill is more than 1,000 pages long. The key content of the bill is to allocate 52.7 billion US dollars for domestic manufacturing of chips, including 39 billion US dollars for incentive plans and 11 billion US dollars for R&D and labor development plans. In addition, the government will provide 25% investment tax incentives for chip factories in the United States, with an estimated cost of $24 billion. There are about 200 billion dollars for scientific research.

　　Qatar Al Jazeera reported on the 9th that the bill also includes "important restrictions" demanded by Republicans and China hawks, that is, enterprises applying for federal subsidies must promise not to develop precision chip manufacturing in Chinese mainland. The bill stipulates that subsidized companies are prohibited from significantly increasing production of "advanced process" chips (generally referred to as chips below 28 nanometers) in China for a period of 10 years. Companies that violate the ban may be required to refund all subsidies.

　　On August 9, Micron, a chip maker, announced that it would seek the federal subsidy. Micron said it plans to invest $40 billion to build a new chip manufacturing plant in the United States by 2030. This investment will increase the share of the United States in the global memory chip manufacturing industry from the current 2% to 10%. Chip giant Intel also said it would apply for subsidies to support its plan to build two chip factories in Ohio. The company will also seek subsidies for its chip factory expansion plan in Arizona and its chip packaging factory in New Mexico. TSMC, the world’s largest chip maker, also said it would seek subsidies for building a chip factory in Phoenix.

　　Forcibly change the global pattern of chip industry

　　Li Zheng, an associate researcher at the American Institute of China Institute of Contemporary International Relations, told the Global Times reporter that the signing of this bill has provided the United States with more chips for international cooperation and negotiation, and the United States may accelerate the construction of the so-called "four-party alliance of chips", with industrial subsidies and market access as chips to win over South Korea, Japan and Taiwan, China, and form the "backyard" of the American chip industry.

　　On the 9th, BBC9 reported that the exclusive policy of the bill against China’s chip industry made many chip companies face the problem of "taking sides" between China and the United States. Because Chinese mainland is the largest chip market in the world, this "taking sides" approach makes TSMC, Samsung, Intel and other enterprises fall into a dilemma. Samsung has a memory chip manufacturing factory in Xi ‘an, SK Haishili has memory chip manufacturing factories in Wuxi and Dalian, Intel and Micron also have chip packaging and testing factories in China, and TSMC is the only company that produces advanced process chips below 28 nm in Chinese mainland (its Nanjing factory produces 16 nm chips). "This is directly targeted in the Chip and Science Act". The BBC reported that in fact, in the past, all American equipment manufacturers have received letters from the US Department of Commerce, informing them not to supply China with equipment for the manufacture of chips of 14 nanometers or less.

　　Security officials in Taiwan Province are forcing Foxconn to abandon its $800 million investment in Chinese mainland’s chip company Ziguang Group, the Financial Times reported on the 10th. Foxconn announced the investment last month, but an unnamed security official of the Democratic Progressive Party authorities claimed: "This will definitely not pass."

　　An unnamed industry insider said in an interview with Global Times that in recent years, the United States has taken various measures to create a "small circle" of chips that crowd out Chinese mainland, and the so-called "China guardrail" clause in this chip bill is seriously harmful to China and even the whole industry. In the future, the United States may rely on this dominant behavior of occupying the industrial chain to "make whatever countries produce", which may break the division of labor and pattern of the global chip industry.

　　China’s embassy in the United States said on the 9th that it "resolutely opposes" the bill, denouncing it as "cold war and zero-sum game thinking". The China Council for the Promotion of International Trade and the China International Chamber of Commerce also issued a document expressing their opposition on the 10th, arguing that the provisions in the bill discriminate against some foreign enterprises, highlighting that the United States and Italy intend to use government forces to forcibly change the international division of labor pattern of the chip industry, which has harmed the interests of enterprises from all over the world, including Chinese and American enterprises. "This is the ultimate arms race in the 21st century." The New York Times said on the 10th that "commercial and geopolitical motives" urged China to make chips as quickly as possible, while the United States had "competitive motives" to prevent China from acquiring advanced technology.

　　"It’s just copying China’s plays."

　　The New York Times said that shortly before the US bill came into effect, China’s chip manufacturers had just achieved a major technological breakthrough and announced that they had successfully manufactured 7-nanometer chips, "which surprised the world". NPR said on the 9th that the bill "may not be able to curb China’s influence", and it may force China to "make more independent innovations in chip manufacturing to catch up with the United States and its East Asian counterparts".

　　Republican lawmakers in the United States who disapprove of the bill say that this may just give more benefits to enterprises with high profits. "I know that Democrats want to say that this is a competitive bill, but it is just copying China’s script." Rep. Rogers, a Republican, said that in 2015, the China administration put forward the "Made in China 2025" action plan to invest or subsidize ten high-tech industries that China considered to have long-term strategic value, and now the Biden administration is only trying to "spend more than China". According to the Nikkei Asia Review, China has invested US$ 150 billion in the chip industry, and TSMC said it plans to invest US$ 100 billion to expand its manufacturing capacity within three years. The European Union is also legislating for its own chip manufacturing. Therefore, the Chip and Science Act may not bring about "earth-shaking changes".

　　"None of the well-known American multinational companies, including Intel, grew up with government subsidies." Taiwan Province Zhongshi News Network said on the 10th. According to the estimation of Boston Consulting Group, if Washington adopts the policy of "hard decoupling technology" from China, it may even harm the interests of some American chip companies, or make them lose 18% of the global market share and 37% of the revenue, and reduce 15,000 to 40,000 high-skilled jobs. In other words, the subsidies provided by the Chip and Science Act may not make up for the cost of chip companies moving their factories from China to the United States.

　　Zhang Zhongmou, the founder of TSMC, said that the cost of producing the same chip in the United States is "about 50% higher than that in Taiwan Province". He said that it is "futile, wasteful and very expensive" for the United States to increase the local chip manufacturing industry. Collier, a risk management expert at Redford University in Virginia, told CNN on the 9th that no matter how hard countries try to support their manufacturing bases, it is impossible to decouple from the global supply chain, especially the design, manufacturing and raw materials of chips are distributed in many different countries and regions. "This is a huge network. No matter how hard countries try to localize manufacturing, a certain degree of interdependence is inevitable. "