SEMICONDUCTORS, the backbone of high technology used to produce integrated circuits or chips for computers and smartphones, is China's biggest single import by value.
China, for years, has been trying to steer away from its dependence on the United States and other countries through innovation-driven development and a plethora of state-led policies.
So when the US hawks added the world's second-largest smartphone maker Huawei Technologies Co Ltd to the US entity list and barred it from acquiring essential chips from Taiwan Semiconductor Manufacturing Company, it fired up China to mitigate its reliance on foreign suppliers and pick up the pace towards technological independence.
The Chinese Communist Party in its fifth plenum placed innovation as a key driver for China's long-term modernisation programme to make headway in core technologies, which likely include production of top-of-the-line semiconductors with a focus on science and technology to provide a strategic support for national development.
The 14th Five-Year Plan reaffirmed China's commitment to become a global leader in innovation and build success in new industrialisation, informatisation, urbanisation and agricultural transformation via "dual circulation", a term coined by President Xi Jinping last spring as a strategy to fuel the domestic cycle (production and consumption) by 2035.
After Goldman Sachs predicted that China can produce seven-nanometer (nm) chips by 2023 and New York Times columnist Thomas Friedman said Beijing made attempts to build an entire microchip supply, ending its dependence on US technology through the latest Five-Year Plan, China's largest chip foundry, SMIC, last month added a new chapter in the country's chipmaking history by getting closer to introducing the more advanced N+1 7nm node.
Recently, the US Department of Commerce sanctioned dozens of Chinese companies, including SMIC. It was claimed the move would limit the company's ability to produce semiconductors at advanced technology levels (10nm or below).
The US action was apparently a reaction to China's step forward for attaining technological self-reliance and SMIC's rise despite the US blockade.
In the long term, US sanctions could strengthen the Chinese chip-making champion since it reportedly completed the development of process nodes from 28nm to 7nm in record time and may rush for volume production of leading-edge 7nm nodes ahead of schedule.
The only conclusion that can be drawn from the aggressive move is that the US thinks China, if not stopped, may catch up with America soon in technology and potentially end American global technological dominance.
After US President Donald Trump announced that the US was considering imposing exports restrictions on SMIC in September, an industry group in the US with 2,400 members worldwide warned that blacklisting the company would jeopardise the US' technological edge, affect the delivery of US goods and hit US market share across the world, in addition to having detrimental impact on the US' industry, economy and national security.
Peterson Institute senior fellow Chad Bown cautioned that restricting major semiconductor manufacturers in Taiwan and South Korea from using US tools to make anything for Huawei would instead threaten the US allies' sovereignty and set a dangerous precedence of unilateralism.
In a highly-entwined world,the semiconductor industry is a global affair as components for a chip could travel more than 40,000km and cross borders over 70 times before they are installed in a device or delivered to a customer.
The US is using its leverage to disrupt globalisation and global supply chains that experts said won't be practically feasible, at least in the foreseeable future.
Trump's White House is impetuously taxing itself in an effort to cut off technology exports to China.
But unlike what happened to Huawei, the US did not add SMIC to the list, which would have prevented it from buying US supplies and technology. However, it remains concerned that US export restrictions are still a threat.
With only weeks left before his departure,Trump is not only causing pain for US exports, he is also infringing on international trade rules by causing harm to the free market, fair competition and the national interest of US allies, as well as killing off what remains of US credibility internationally.
US President-elect Joe Biden will inherit technology chaos from his predecessor; so he will have to make hard choices—carry on Trump's anti-China legacy to stave off political hogwash in the country or shield the semiconductor global supply chain from disruption to regain the trust of US manufacturers and allies.
Whatever path Biden chooses will define the course of the China-US technology war.
The writer writes on economy, geopolitical issues and regional conflicts and is an opinion contributor to CGTN, News24, The Mail & Guardian and The Express Tribune (partner of The International New York Times)