Suddenly, Biden threatened ASML, TEL!

(Bloomberg) -- The Biden administration, facing a backlash from China's chip crackdown, has told Allies that if companies such as Tokyo Electron Ltd. and ASML Holding NV continue to supply China with advanced semiconductor technology, The United States will consider the strongest possible trade restrictions.

To rally support from Allies, the United States is considering whether to implement a measure known as the Foreign Direct Product Rule, or FDPR, according to people familiar with the recent discussions. The rule allows the United States to impose controls on foreign-made products, even if they use only minimal amounts of American technology.

The move - seen by Allies as a harsh measure - would be used to curb the Chinese operations of Japan's Tokyo Electronics and the Netherlands' AsML, which make chip-making equipment crucial to the industry. The US is taking the idea to officials in Tokyo and The Hague if the two countries do not step up their own measures against China, according to the sources, who spoke on condition of anonymity.

Us Treasury releases draft to limit high-tech investment in China

Release Date: The US Treasury Department released a 165-page draft on June 21.

Purpose: The intent is to limit U.S. entities' investment in China in three high-tech fields: semiconductor and microelectronics, quantum information technology, and artificial intelligence.

Background: On August 10 last year, US President Joe Biden signed an executive order to restrict investment in China in these sectors and ordered the Treasury Department to develop enforcement measures. ·

Draft details

Name: The draft is called the Notice of Proposed Rulemaking (NPRM).

Scope of restrictions: including equity investments, convertible debt financing, greenfield investments, and contributions as limited partners.

Areas of focus: semiconductors and microelectronics, quantum information technology, artificial intelligence, especially key technologies involving "next-generation military, intelligence, surveillance, or cyber capabilities."

Implementation time: The Ministry of Finance will be open for comment until August 4, after which the final implementation details and effective date will be published. Foreign media speculated that it could take effect before the end of the year. ·

Foreign media reaction

Bloomberg: It is believed that the draft focuses on curbing China's development capabilities in the fields of semiconductors, quantum computing and artificial intelligence, especially the US government wants to prevent China from developing artificial intelligence applications that can be used for weapon positioning or location tracking.

Lianhe Zaobao: Mentioned the types of investments that are restricted, noting that those who violate the rules could face criminal and civil penalties.

The New York Times said the draft was aimed at curbing new American investments in China's key technology industries, arguing that they could bolster the country's military power and exacerbate economic tensions with China. ·

Domestic expert opinion

Influence: The move will accelerate the "decoupling" of the US from China in high-tech fields.

China's response: Stimulate China's determination to strengthen its own scientific and technological innovation.

Summary

The draft measures issued by the US Treasury are specific measures by the US government to restrict high-tech investment in China and are aimed at curbing China's development in key scientific and technological sectors, especially those involving military and intelligence technologies. Such a move would further exacerbate economic and technological tensions between China and the United States, and could prompt China to strengthen its indigenous innovation capabilities.

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