The United States will tighten controls on cutting-edge semiconductor exports to China, the Commerce Department said Tuesday, in the latest step aimed at hobbling Beijing's efforts to advance technologies as part of its military modernization.
The expansion will restrict Nvidia Corp. and other manufacturers from selling to China artificial intelligence chips and advanced equipment necessary to produce them.
The new rules, upgrading the sweeping chip curbs on China announced by President Joe Biden's administration a year ago, come as senior officials of the world's two largest economies seek to ease tensions and arrange one-on-one talks between their presidents on the sidelines of a multilateral meeting next month.
As the United States ramps up efforts to block overseas Chinese subsidiaries from gaining access to the latest know-how, the department's Bureau of Industry and Security said the revamped rules impose license requirements on exports of advanced chips to more than 40 additional countries that could divert the technology to China.
The bureau also said they will now require licenses to ship chip manufacturing equipment to 21 other countries outside China that are under U.S. arms embargoes.
"Today's updated rules will increase effectiveness of our controls and further shut off pathways to evade our restrictions," the bureau quoted Commerce Secretary Gina Raimondo as saying. "These controls maintain our clear focus on military applications and confront the threats to our national security."
On Wednesday, China's Commerce Ministry said Beijing is "strongly dissatisfied with and firmly opposes" the U.S. step, claiming Washington "abuses export control measures and implements unilateral bullying."
The ministry called for the lifting of the export controls as soon as possible and warned that China will "take all necessary measures to resolutely safeguard its legitimate rights and interests."
Along with the United States, other industrialized countries including Japan have also been taking steps to make it harder for China to access critical technologies.
After announcing the initial export controls in October last year, the Biden administration asked Japan and the Netherlands, both home to leading chip-producing equipment makers, to cooperate in stymying China's access to high-tech devices.
Japan updated its restrictions in July, going beyond the initial U.S. curbs by adding 23 devices that are needed to produce the most high-end types of chips. The Netherlands also expanded the scope of its export controls in September.
China has reacted sharply to the U.S. move, filing a complaint with the World Trade Organization in December last year accusing Washington of abusing export rules under the guise of protecting national security.
In apparent retaliation for such restrictions, China rolled out export controls on gallium and germanium in August. The two metals are crucial for producing chips, with China saying the controls are needed to protect its national interests.
Despite considerable disagreements over a number of political and economic issues, senior officials of the two countries have been meeting more frequently over the last several months, as both sides agree on the importance of maintaining open lines of communication.
Biden has also repeatedly said his administration is not seeking to decouple from China but rather to "de-risk" the relationship, a process aimed at protecting national security and ensuring stable supply chains for strategically vital industrial goods.
Biden has said he is keenly anticipating face-to-face talks with Chinese President Xi Jinping in mid-November in San Francisco when he hosts the Asia-Pacific Economic Cooperation forum leaders' summit. The two leaders last met in person in November last year in Indonesia.
