Mon, Dec 04, 2023 page12

• US secretary warns against China ‘threat’

  CHINA NOT A FRIEND: ‘Newsflash: Democracy is good for your businesses,’ US Secretary of Commerce Gina Raimondo said as she gave a speech at a national defense forum

  • AFP, SAN FRANCISCO and WASHINGTON
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  US Secretary of Commerce Gina Raimondo on Saturday urged lawmakers, Silicon Valley and US allies to stop China from getting semiconductors and cutting-edge technologies key to national security.

  Speaking at an annual national defense forum in Simi Valley, California, Raimondo called Beijing “the biggest threat we’ve ever had” and stressed that “China is not our friend.”

  The world’s top two economies are locked in a fierce commercial and geopolitical rivalry, in which her department plays a leading role.

  

  US Secretary of Commerce Gina Raimondo speaks at the Senior Chinese Leader Event held by the US National Committee on US-China Relations and the US-China Business Council on the sidelines of the APEC summit in San Francisco on Nov. 15.

  Photo:Reuters

  In October, Raimondo unveiled a series of restrictions on the export of advanced chips to China, including those used in the development of artificial intelligence (AI), to prevent their use by Beijing for its military.

  “I know there are CEOs of chip companies in this audience who were a little cranky with me when I did that, because you’re losing revenue. Such is life, protecting our national security matters more than short-term revenue,” she said.

  “Newsflash: Democracy is good for your businesses. Rule of law here and around the world is good for your businesses,” she said.

  Raimondo said that Nvidia Corp, maker of the most sophisticated chips needed to develop the latest generation of AI, had developed a product that performs just below the limit set by her department for export to China.

  “That’s what industry does,” she said. “That’s not productive.”

  “Every day China wakes up trying to figure out how to do an end run around our export controls ... which means every minute of every day, we have to wake up tightening those controls and being more serious about enforcement with our allies,” she said.

  Separately, the US government proposed new rules on Friday regarding its electric vehicle (EV) subsidies, setting limits on material that producers can source from China or other rival countries.

  The guidelines spell out how EVs could qualify for a tax credit of up to US$7,500 under US President Joe Biden’s landmark climate action plan, the Inflation Reduction Act.

  They come as Washington works to reduce its burgeoning electric car industry’s reliance on China. Currently, the key EV industry is dominated by China.

  Under the latest proposal released by the US Department of Treasury, an eligible clean vehicle cannot contain battery components made or assembled by a “foreign entity of concern” starting next year.

  From 2025, a qualifying vehicle also cannot contain critical minerals extracted, processed or recycled by such entities.

  This targets companies owned by, or subject to the jurisdiction of countries like China, Russia, North Korea and Iran. They would be barred from providing such materials to vehicles aiming to qualify for tax breaks.

  A firm could be considered a foreign entity of concern if it were incorporated in one of these countries, or if it hit a 25 percent ownership threshold.

  The latest rules would likely reduce the number of vehicles eligible for tax credits while piling pressure on automakers as they grapple with the transition to producing electric cars.
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