CHINA WATCHChina Launches WTO Dispute Over U.S. Chip Export Controls

By Lin Feng Liam Scott

Capping a year of increasing tension between Washington and Beijing over advanced chips used in everything from smartphones to weapons of mass destruction, China has initiated a trade dispute at the World Trade Organization (WTO) against the United States for imposing wide-ranging semiconductor export controls on China.

The U.S. Department of Commerce’s Bureau of Industry and Security announced an extensive set of regulations on October 7, which restricted chips made using American tools from being exported to China, in addition to any semiconductors designed for artificial intelligence applications.

The wide-reaching export controls have effectively hobbled China’s semiconductor industry, prompting Beijing to announce on December 12 that it would initiate the WTO dispute.

“China’s filing of a lawsuit at the WTO is to resolve China’s concerns through legal means and is a necessary way to defend its legitimate rights and interests,” the country’s Ministry of Commerce said in a statement.

Beijing’s statement added that the U.S. restrictions “threatened the stability of the global industrial supply chain.”

In response, the United States said the WTO was “not the appropriate forum” to settle national security concerns, the BBC reported.

“U.S. national security interests require that we act decisively to deny access to advanced technologies,” U.S. Assistant Secretary of Commerce for Export Administration Thea Kendler said.

The export controls — which are among the strictest Washington has imposed — aim to slow China’s ability to produce high-end semiconductors that have uses in commercial and military technology. Advanced chips are used in artificial intelligence, supercomputers and weapons.

The U.S. began restricting sales of American technology to Chinese companies such as Semiconductor Manufacturing International Corp. in 2020. In December 2021 the United States sanctioned nine Chinese technology companies over their ties to the surveillance of ethnic minorities such as Uyghurs.

In late August of this year, the Biden administration restricted technology companies like Nvidia and Advanced Micro Devices from selling graphics processing units to China.

China’s initiation of a WTO dispute over the export controls did not surprise Martijn Rasser, director of the technology and national security program at the Washington-based Center for New American Security.