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On the big stage of global economic and trade interaction, there is a remarkable trend. A piece of announcement, a new policy, they are intertwined, outlining a new chapter in the international economic map.
Originating on August 10, 2023, the announcement on the website of China's Ministry of Commerce is stern and resolute, calling on the US to "respect the laws of the market economy and the principles of fair competition", not to "artificially hinder global economic and trade exchanges and cooperation", and not to "set obstacles to the recovery of world economic growth". This sentence became the prelude to an economic storm.
US President Joe Biden, without mercy, signed an executive order on August 9. The order, authorizing the finance minister, will restrict some Chinese investment in semiconductors and microelectronics, quantum information technology, and certain artificial intelligence areas. Biden said this is an urgent step by the country to deal with technological threats from countries such as China.
However, the move caused an uproar in Washington. The two parties have very different attitudes towards this move, but they have shown a high degree of unity in the science and technology war against China. Democratic Party leader Schumer applauded the decision, believing it would effectively prevent funds from flowing to China's military use. Republicans, on the other hand, argue that Biden's order is not thorough enough.
The impact of this restriction is most pronounced on Chinese start-ups. China is still in its early stages in chip design and manufacturing tools, while the United States dominates in this area. The move is bound to cast a shadow over China's tech companies.
However, this move by the United States has also raised a series of concerns. The New York Times warned that this would anger Beijing and could open a new front in the Sino-US trade war. There is also a domestic controversy over the restraining order, with some fearing that the U.S. economy will be affected, arguing that it will put the U.S. economy at a disadvantage.
In fact, the implementation of this policy will face many difficulties. The U.S. government needs to maintain close ties with Silicon Valley and Wall Street to ensure smooth policy implementation. At the same time, for companies, they are also gradually reducing their reinvestment in China.
The effects of this economic storm will gradually be felt. The decline in FDI data shows that FDI inflows to China have slowed down in recent years. This is in line with China's long-term industrial supply chain upgrading and the trend of diversification of global supply chains.
In this era of globalization, economic interaction is everywhere. The introduction of the new policy will undoubtedly have a far-reaching impact on Sino-US relations. However, this may only be a temporary storm for Chinese companies, who are still confident and willing to invest in major areas.
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