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The United States has reportedly ordered major American tech firms not to build advanced technology plants in China. Companies that were granted federal funding are barred from setting up their tech facilities for 10 years.
According to BBC News, US President Joe Biden’s administration released this order and published the guidelines as well, as part of its $50 billion scheme to boost and expand the local chipmaking industry. Moreover, the ban comes as business leaders strive to get more support from the government to minimize reliance on China amid the global chip shortage.
It was noted that China and the U.S. are involved in a long-running conflict related to trade and technology. In an effort to keep its technology advantage and mastery, PresidentBiden signed a law committing a total of $280 billion or about £232 billion for the local high-tech manufacturing and scientific research. The government is extending this support amid fears that China may surpass the U.S. in technology.
The federal government’s investment is a package that will also offer tax breaks to firms that will build their computer chip production facilities in the country. Currently, the United States churns out about 10% of the total global supply of chip products, which are the major components of everything - from mobile phones, to automobiles, to appliances, and more.
“We are also going to be implementing the guardrails to ensure those who receive CHIPS funds cannot compromise national security. They are not allowed to use this money to invest in China and they cannot develop leading-edge technologies there for a period of 10 years,” Gina Raimondo, the US Commerce Secretary, said in a statement as she explained the US Chips and Science Act.
She added, "Companies who receive the money can only expand their mature node factories in China to serve the Chinese market. They cannot send the latest technology overseas.”
Meanwhile, it was reported that the Chinese Embassy in the U.S. strongly expressed opposition to the semiconductor bill that was signed by Biden just last month. The Chinese officials went on to say that the move brings the "Cold War mentality" into mind.
