China won’t escalate in tech war with US

We still don’t know a lot about the export restrictions on advanced semiconductor technology imposed by the US. At what level does the US intend to enforce the new rules? Will it allocate the appropriate resources to meet those ambitions? For the moment, let’s assume we’re indeed dealing with a total crackdown on China’s abilities to develop its own leading and trailing-edge semiconductor manufacturing capacity, effectively throwing back China’s semiconductor ambitions years, if not decades.

This level of economic cold war between major powers hasn’t been seen since, well, the Cold War. The obvious question is: how will China respond? Gregory Allen, a fellow at the Center for Strategic and International Studies based in Washington DC, drew a parallel with Imperial Japan, which concluded in 1941 that it was essentially at war with the US after the latter instigated an oil boycott. This was in response to the Japanese occupation of Indo-China. Months later, the Japanese attacked Pearl Harbor. Semiconductors are the oil of the 21th century, and although the newly imposed limitations aren’t as all-encompassing as the oil boycott was, Allen wondered in the New York Times whether China sees it that way. “I kind of doubt it,” he answered his own question.