Biden targets China’s chip industry with wider trade bans

WASHINGTON — The Biden administration announced Monday broader restrictions on advanced technology that can be sent to China, in an effort to prevent the country from developing its own advanced chips for military equipment and artificial intelligence.

The restrictions prohibit the sale of certain types of chips and machinery to China and add more than 100 Chinese companies to a restricted trade list. The move marks the Biden administration’s third major update over the past three years to a set of rules that have tried to cut China off from the world’s most advanced technology.

The rules are also likely to be the administration’s last on Chinese technology before President-elect Donald Trump’s inauguration next month, and they aim to cement the Biden administration’s legacy in slowing down a rival country’s technological progress.

National security officials have said China’s ability to acquire and make advanced computer chips poses a threat to the United States. The chips are crucial for powering AI and supercomputers that can be used to launch cyberattacks, design new weapons, create surveillance systems and increase the military’s ability to respond accurately and rapidly to foreign attacks.

The rules advance measures the Biden administration issued in October 2022, and again in October 2023. They have been the subject of fierce lobbying by both national security hawks eager to crack down on China and the chip industry, which has argued that controls that are too tight risk hurting U.S. tech leadership.

Both camps ultimately left their mark on the restrictions issued Monday. The rules add 140 Chinese companies, many of which make the tools and machinery necessary for manufacturing chips, to a restricted trade list called the entity list — one of the largest batches of additions so far.

The rules also bar shipments to China of certain advanced memory chips, and establish global restrictions on shipments of roughly two dozen types of equipment used to manufacture chips, effective Dec. 31. They also contain new guidance for U.S. companies to carry out due diligence on the Chinese factories they sell to.

But some officials and analysts have said the regulations were shaped by industry lobbying, and have pointed out certain exceptions that may be favorable to U.S. exporters.

This article originally appeared in The New York Times.

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