China Reached Out to WTO To Avenge US Chip Embargo

• China responded to the U.S. embargo on chip imports by filing a dispute at the World Trade Organization, escalating the technology war between the two nations.

• China’s commerce ministry said its WTO complaint was necessary to defend its “legitimate rights and interests” after the U.S. introduced sanctions in early October to make it harder for China to buy or develop advanced semiconductors, the Financial Times reports.

• Ben Kostrzewa, an expert on U.S.-China trade relations, said China’s complaint was unlikely to “create any legal effect” unless the suspended Appellate Body resumed its work.

• In an attempt to show that they are both interested in improving relations, Joe Biden, U.S. President, and Xi Jinping their first meeting as leaders was held.

• China’s complaint followed a landmark ruling in which a WTO panel backed Beijing against Washington.

• The export controls aimed at hampering China’s ability to use high-end U.S. technology for military applications.

• China enlisted Alibaba Group Holding Limited (NYSE: BABA() Tencent Holding Ltd (OTC: TCEHY) alongside state-backed groups to bolster the country’s semiconductor capabilities.

• Recent years have seen the rise of Chinese chipmakers such as Semiconductor Manufacturing International (SMI), Yangtze Memory Technology (YMT) and Hua Hong Semiconductor.

• The companies relied on foreign companies to provide the core elements of the underlying chip design as well as the equipment for making them.

• Lam Research Corp (NASDAQ: LRCXCalifornia-based chipmaking equipment supplier, began employing workers in China.

• The U.S. and Japan negotiated with the Netherlands to ban their companies from selling advanced Chinese semiconductors’ chipmaking tools.

• Photo by Body Stock and Dragon Claws via Shutterstock

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