What's New
China on Wednesday warned of disrupted supply chains ahead of Congress's vote on a bill that would impose further limits on American technology investments in China on national security grounds.
Additionally, the legislation calls for a government study of vulnerabilities in U.S.-based modems and routers, after a wave of cyberattacks against networking devices carried out by hackers believed to have Chinese state ties. The bill also calls for a review of Chinese property purchases near sensitive sites such as military bases.
Why It Matters
The legislation comes amid escalating U.S.-China trade tensions and tit-for-tat export restrictions. The U.S. continues to tighten controls on technologies, such as advanced semiconductors and chipmaking equipment, that could support Chinese missiles and other weaponry. China has retaliated by banning the export of strategically important metalloids like germanium.
What To Know
During the Chinese Foreign Ministry's regular press conference on Wednesday, spokesperson Lin Jian emphasized the mutual benefits of U.S.-China trade cooperation.
"To overstretch the concept of national security and deliberately obstruct normal economic and trade exchange for political agenda contravenes the principles of market economy, fair competition and free trade, which the U.S. claims to champion," he stated.
Lin warned that such measures would "destabilize global industrial and supply chains" and called on U.S. lawmakers to "stop politicizing and weaponizing economic and trade issues."
What People Are Saying
"China is an economic adversary, and we must take bold action to safeguard our future against the Chinese Communist Party," Reuters quoted Pennsylvania Democrat Sen. Bob Casey as saying.
However, some analysts argue that blocking China from technologies such as the chipmaking tools produced by the Netherlands' ASML will hurt Western manufacturers now and in the long term.
"China will build their own equipment industry as a result... China will put more business in China, and there will be a share loss to all global companies," CJ Muse, senior managing director at New York-based financial services firm Cantor Fitzgerald, told the Financial Times.
What Happens Next
The bill builds on existing government measures aimed at reducing perceived national security risks from China, such as rules introduced by the Treasury Department in October.
Once these rules take effect on January 2, they will restrict investments in sensitive industries, including artificial intelligence—a field where China is seen as rapidly closing the gap with the U.S.
Newsweek reached out to the Chinese embassy in the U.S. via email with a request for comment.
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