Efficiency of CHIPS Act and US Sanctions on China

The US and China relations have remained tensed in the past few years, especially concerning Chinese expansionist policies in the South China sea, its relations with Taiwan and infrastructure takeover as far as in Africa. The past US administrations have taken a strong stance against Chinese control in Taiwan and Hong Kong. Previously, the US has imposed Sanctions and export controls on selling advanced technologies to China. The CHIPS Act from Biden administration added another layer of restrictions on the hardware such as Graphics Processing Units (GPU) and relevant technology. The current US administration has followed an incremental approach by imposing additional tariffs on Chinese products.

However, despite of CHIPS Act and sanctions on GPU, Chinese companies like R1 and Alibaba have developed GenAI models that are comparable with OpenAI’s ChatGPT but significantly cheaper. This has raised concerns in the US administration about the effectiveness of the CHIPS Act. However, China’s progress in advance technologies is not limited to the digital space. It is creating a surrounding for these technologies to operate effectively. The recent example of Chinese government’s exercise of seabed mapping is a classical textbook example of creating multi-dimension countermeasures against potential adversaries.

According to the international convention on maritime boundaries, the national maritime boundaries are set at 20 nautical miles. The area within 200 nautical miles from the coastline is designated as an Exclusive Economic Zone (EEZ). Any vessels have a right to travel through EEZ, but the country has an exclusive right to the natural resources in EEZ. According to the WSJ report quoted earlier, Chinese vessels are involved in the seabed mapping beyond their EEZ, raising concerns from the neighbors and other G-7 countries. 

The Russia-Ukraine conflict has witnessed new age of warfare involving drone, especially underwater drones. The Chinese seabed mapping exercise shows its preparedness for the future situations. Taiwan is a globally important center for the semiconductor and has territorial disputes with China. During previous US administration, house speaker Nancy Pelosi visited Taiwan, spiking the regional friction. Using the Russia-Ukraine analogy, Taiwan has a potential to scale up the wartime manufacturing using advance technologies such as underwater drone to challenge Chinese naval superiority. However, Chinese seabed mapping will equip China with the battlefield mapping at the very minute detail.

The first preference in any war strategy is to use advanced technologies and if not available, then develop countermeasures to neutralize the impact of these technologies. The seabed mapping will allow the China to own the entire battlefield in the underwater, submarine warfare neutralizing the impact of advanced technologies. This also raises an important question on the effectiveness of the CHIPS Act and export control as a tool of the US foreign policy. China is bypassing the lack of semiconductors and GPUs through other methods such as seabed mapping or controlling key ports like Hambantota port in Sri Lanka. Currently, China is leading the geopolitical race to increase its sphere of influence. This requires the US to develop an unconventional approach beyond typical sanctions and export controls in their foreign policy.

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