Back to the stone age? US imposes new sanctions against China

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Back to the stone age? US imposes new sanctions against China
Back to the stone age? US imposes new sanctions against China
10 October, 14:57EconomyPhoto: AFP
Experts predict that restrictions on sales of US chips to China for artificial intelligence computing could throw Chinese companies back into the distant past.

The market value of shares of leading Chinese electronic chip makers fell immediately by $ 8.6 billion on Monday, October 10 after the US imposed a new batch of economic sanctions against China, according to the leading British analytical financial publication Financial Times . This comes after Washington unveiled new export control rules on Friday, Oct. 7, which restrict the sale of US-made semiconductors unless suppliers obtain an export license.

The paper's experts argue that restrictions on US sales of artificial intelligence chips to China could send Chinese companies back to the Stone Age. The new restrictions imply that the US authorities themselves will issue special licenses for the export to China of semiconductors for the production of artificial intelligence calculations made using American technologies. The supply of technology and equipment to China that it could use to create its own chips is also limited. Exactly the same conditions are introduced for US citizens cooperating with Chinese chip manufacturers. These Washington restrictions are meant to curb Beijing's plans for technological self-sufficiency.

After the announcement of these measures, the shares of the largest Chinese chipmaker Semiconductor Manufacturing International Corp, fell in Hong Kong trading by 4%, Hua Hong Semiconductor - by 9.4%, and Shanghai Fudan Microelectronics - by as much as 20.2%.

The US Department of Commerce said it added 31 companies to its "unverified list" to make it harder for Chinese companies to manufacture or obtain advanced computer chips vital to cutting-edge technology.

China's end-user-based semiconductor market is known to account for almost a quarter of global demand.

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