China warns chipmaking export curbs ‘just the beginning’

The caution comes as Washington-Beijing tech war escalates

China’s export controls on key components for computer chip manufacturing are "just the beginning," an influential trade policy adviser warned on Wednesday.

Earlier this week China announced that starting next month, special licenses will be required to export gallium and germanium, two key metals used to make computer chips.

Speaking to the China Daily newspaper, former Vice Commerce Minister Wei Jianguo said that should Washington place tougher technology restrictions on Beijing, the government will escalate the countermeasures. The decision to restrict the export of industrial products and materials containing gallium and germanium was made after thoughtful consideration, he added.

The comments follow a report by the Wall Street Journal on Tuesday that the US plans to restrict China’s access to cloud computing to close a loophole that allows Chinese artificial intelligence firms to bypass the current chip export control rules. Cloud services allow customers to gain powerful computing capabilities without buying advanced equipment, such as chips.

Washington and Beijing have been involved in a dispute over semiconductors and other advanced technologies for several months.

READ MORE: US plans to restrict China’s access to cloud computing – WSJ

Reuters reported in May that US officials were considering tightening a rule designed to slow the flow of artificial intelligence chips to China by clamping down on the amount of computing power the chips can have. Last October, Washington introduced export control rules, effectively cutting China off from certain semiconductor chips made with US equipment.

China retaliated in May, by banning memory chips manufactured by Micron, the biggest US producer.

This week, Chinese President Xi Jinping called for "stable and smooth functioning of regional and industrial supply chains” ahead of US Treasury Secretary Janet Yellen’s visit to Beijing to discuss economic issues between the two nations.

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