A report published by the Chinese newspaper “South China Morning Post” (based in Hong Kong), on Saturday, shed light on the crises that factories are exposed to as a result of these restrictions, including a shortage of cadres and the inability to provide spare parts.
The newspaper said that some companies are suffering from severe financial crises, and are on the verge of collapse due to their cessation of work, and China is facing industry disruption as a result of US sanctions.
In detail, she said regarding the reasons and the state of the industry:
- Companies find it difficult to secure spare parts for their imported equipment, and there is difficulty in providing spare parts for equipment they have already purchased.
- Companies are trying to get spare parts from local manufacturers, but it is impossible.
- There is also a crisis in the experience of practicing the profession due to America’s withdrawal of its citizens working in China.
- The ban on China’s imports of chip equipment is set to continue; The Netherlands and Japan joined the United States in imposing sanctions.
- Thus, China must prepare for a long-term competition with the United States.
- At the same time, there is a crisis regarding US companies exporting equipment to China. Because it is committed to supply contracts, and stopping it means a great loss.
With Washington and its allies escalating restrictions on exporting chips to China in recent years, Beijing was forced to respond to them in a double way, which included retaliatory measures against US companies, and work to localize the industry.
Among these procedures:
- China has imposed a ban on the sale of certain products from the American company “Micron”, which makes memory chips.
- It has imposed an export ban on its rare metals, especially gallium and germanium, which are needed to make chips.
- Developed a national strategy, including collaboration between the public and private sectors, to develop a strong digital economy and a fast-growing local market; To provide an opportunity for the chip industry in China, and to update its technologies locally without resorting to foreigners.
- Developing a new system for the chip industry, focusing on research, and achieving well-defined technical goals that make it the foundation for the industry.
Monopoly hurts everyone
But the process of replacing machines based on Western technology with local technology may take a long time.
On this point, economist Youssef Al-Tabei told Sky News Arabia:
- Chip technology around the world no country could stand alone.
- Beijing needs Washington, and vice versa.
- China owns the minerals needed for this industry and controls its home in some countries, and America owns the manufacturing technology and equipment, and competition must be honest, otherwise everyone will be harmed.
- For example, if China stops exporting minerals, chip production will be cut in half, and if America deprives China of manufactured technology, it will be a severe blow to Beijing’s economy.
- This battle has no end, and if a country manufactures from beginning to end, it will literally own the world.
- Therefore, there must be a regulatory agreement for this industry that satisfies everyone.
No winner or loser
Information technology expert, Abd al-Rahman Dawood, agrees with his colleague regarding the difficulty for a particular country to monopolize the chip industry, especially since it is very complex, and the danger of competition between Washington and Beijing reaching an unfair stage.
And he adds to “Sky News Arabia”, explaining the future of the industry and the race for it:
- The chip industry in the future will be more important than the oil industry, and will move the entire technology market in a short time.
- Therefore, this industry must be treated as medical and anatomical sciences; Any available to everyone.
- Cooperation between Beijing and Washington is essential; There will be no winner and loser, and the exchange of withholding what each country owns from the other will result in everyone being defeated in this war.
- China has already begun to develop its industry domestically, but it will take years for it to be able to rely on itself.
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