US: new round in the tech contest with China

US President Joe Biden has issued an executive order restricting US investments in China in the areas of semiconductor technology, AI and quantum computing. He explained that the measure is aimed at preventing China from using advanced technologies to expand its military power and undermine US national security. Beijing has voiced dismay and complained of distortion of competition.

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Tages-Anzeiger (CH) /

Bad timing for China

Things are not looking good for the Chinese economy, notes the Tages-Anzeiger:

“The latest broadside in the tech dispute with Washington could not have come at a worse time for Beijing. China's economy is in danger of tanking in the long term. Both consumer and producer prices are falling, indicating a demand problem in the market. As a result, China's companies are barely investing any more, but those that don't expand their capacities won't report growth. The big danger is that the companies will all start reducing their debt at the same time to avoid insolvency. However, what at first glance sounds like a healthy move for each individual company will turn into a scourge if they all do it at the same time, because it would further stifle growth.”

De Tijd (BE) /

A US illusion

Biden's plans to further restrict investment in China are already ineffective, warns De Tijd:

“Because this step doesn't reduce dependence on China but only makes production more expensive due to the detours, the costs are greater than the benefits. As long as the American measures are not more precisely and clearly defined, this decoupling will hardly impress anyone. There is also the danger that countries that are dependent on Chinese investments for their production will opt for Beijing if forced to choose. America's China policy may appear tough, but it won't do much good. Despite Uncle Sam's harsh tone, our iPhones are still Chinese, just as they were five years ago.”

Frankfurter Allgemeine Zeitung (DE) /

Not without political risks

The Frankfurter Allgemeine Zeitung has mixed feelings about the move:

“Since the United States guarantees the security of some allies in Asia, potentially also that of Taiwan, Biden's decree makes sense from a strategic point of view. No one in the West can have an interest in further strengthening China's already rapidly growing armed forces. Politically, however, such measures put a strain on the relations with China. In Beijing, not just because of the difficult economic situation, Biden's move will be interpreted as another unfriendly act aimed at thwarting China's rise. Countermeasures are likely, and any attempt to disengage China from its alliance with Russia will not be made easier against this backdrop.”