CCP Criticizes US Chip Law as a Threat to Trade

On Wednesday, the Chinese Communist Party (CCP) criticized a U.S. law which encourages the production of processor chip in America and reduces reliance on Asian suppliers as a threat to trade and an attack on Chinese business.

The law, signed by President Joe Biden this week, promises $52 billion in grants and other aid to investors in U.S. chip factories. It responds in part to warnings that supplies could be disrupted if the CCP attacks Taiwan, which produces up to 90% of high-end chips. Beijing claims the self-governing island as part of its territory.

The measure would “disrupt international trade and distort global semiconductor chains,” said Foreign Ministry spokesman, Wang Wenbin. “Communist China firmly opposes that.”

Wang said that parts of the law “restricts companies’ normal investment and economic and trade activities in mainland China,” without giving details.Disruption in chip supplies following the coronavirus pandemic hampered production of goods from smartphones to cars and highlighted the world’s reliance on Taiwanese chips and Chinese factories that assemble most electronic devices.

Fears of disruption have been fueled by threats from the People’s Liberation Army (PLA) to attack Taiwan, which split from the mainland in 1949 after the civil war.

PLA conducted military drills on the island last week in retaliation for a visit by U.S. House Speaker Nancy Pelosi. The CCP believes the U.S. official’s visit to Taiwan might encourage its leaders to make its de facto independence, which the mainland says would lead to war.

The “CHIPS and Science Act” calls for a total of about $200 billion in research spending over 10 years, according to the Congressional Budget Office.The CCP has spent tens of billions of dollars developing the its own chip production industry. Communist China’s factories produce low-end chips for cars and other products, but cannot supply high-end smartphones and other top-notch devices.