Case study: The US limits China's access to chip technology

In October 2022, the Biden administration introduced export controls to limit China’s access to advanced US semiconductors and technologies, aiming to maintain US technological superiority and address security concerns. These controls, targeting areas such as advanced chips and supercomputer components, were tightened in 2023. 

This law allows the US to sanction any company that sells this technology to China. Japan and the Netherlands, also major chip-making countries, joined this restriction, forming a structure that limits China’s technological growth. Their close ties to the US for security, along with many financial connections, influenced this decision, even though China is Japan’s top trading partner. This example illustrates how structural power interconnects and creates a power dynamic that restricts China's access to chip-making technology.

In the early 2000s, integrating China into the global community was viewed as a smart choice. Both the Bill Clinton and George W. Bush administrations supported this idea, believing that connecting China’s economy to the world would lead to stability and shared benefits. However, this did not result in the expected push towards democracy in China. Instead, China has taken advantage of its economic ties to enhance its military through a strategy called “Military-Civil Fusion,” which uses technology from civilian sectors, much of it provided by US partners. As a result, many now view the technological relationship with China as a risk. At the same time, the United States has recognised opportunities to turn this interdependence to its strategic advantage against China.

The move represents a clear flexing of U.S. muscle in its competition with China, with analysts saying it amounts to a new strategy of high-tech containment. 

Although the United States and China are economically linked, they each have different strengths. The United States is taking advantage of these differences by controlling important points in the semiconductor industry, where it holds a strong position. With the US and its allies producing over 90 percent of the world's semiconductor equipment, China relies heavily on foreign suppliers for chips. The Biden administration is using this control to slow China’s chip industry, especially in the area of artificial intelligence. They are focusing on key supply chain areas, such as lithography equipment from the Dutch firm ASML and advanced AI chips, aiming to restrict specific sectors while trying to limit wider economic impacts.