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Stronger-sounding U.S. tech sanctions against China don’t bite much. According to a new Wall Street Journal report, official data from the Commerce Department shows that the US will accept all requests for technology exports to China.
According to the data, By 2020, 95% of the <0.5% of products requiring export licenses to China have been approved. In the year By 2021, the approval rate has dropped to 88% – meaning nearly nine out of 10 technology export licenses are still green.
Remember, the purpose of these sanctions is to deny China access to technology that can be used (or repurposed) in military weapons. According to critics who have seen the numbers, this implementation is falling by the wayside. Important U.S. semiconductors, AI technologies and even aerospace components are still being accepted for export, according to the WSJ.
A leading critic of these lax controls is former Pentagon China export control analyst Steve Kuhn. Coon, who resigned from his position at the Pentagon a year ago, said the figures reported by the WSJ were evidence of a significant policy failure.
The crux of the problem seems to stem from the Commerce Department’s growing concern over its central purpose—promoting American exports—and how this has clouded the current question of export controls (especially with regard to China).
Not everyone believes the current policy is worth pushing. Some worry that U.S. export controls will hurt American businesses while giving clear opportunities to rivals in high-tech countries like Japan, Germany and South Korea.
The WSJ report cited findings by Texas Representative Michael McCaul that blacklisted Chinese companies such as Huawei and SMIC in 2018. It highlights the fact that between November 2020 and April 2021, more than $100 billion in exports have been approved. They forbid direct exports, only applying for a license – which is usually granted. It is also believed that entities not included in the blacklist can be used to import technology products into China, which are then transferred to blacklisted companies.
Starting in 2021, SMIC is shipping 7nm chips based on technology copied from TSMC. US export controls are believed to have been a major obstacle to China’s capture of advanced semiconductors (and the means to manufacture them).
The administration of the United States has gritted its teeth against China, but trade statistics indicate that this policy is not strictly implemented, but a lot of talk.
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