Unmasking the real aim of US sanctions against China

Restrictions offer no real protection and damage bilateral relations, experts say

Editor's note: As the United States has been imposing economic sanctions and export controls of technology on China, this page analyzes its purpose and reviews some of its sanctions against China in recent years.

For several years the United States has imposed tariffs, sanctions and export controls on China, actions that have brought bilateral relations to their lowest point in decades.

Although the US has said the measures are for national security reasons, they can also be seen as part of an unfolding so-called Thucydides trap, laying the groundwork for a potential kinetic conflict.

The term Thucydides trap was popularized by a US political scientist, Graham Allison, to describe a tendency toward war when an emerging power threatens to displace an existing great power as a regional or international leading power.

Much of the more recent US focus has been on restricting the export of technology, such as semiconductors, which Washington argues China can convert to military use. However, these days many technologies can be used for both civilian and military purposes.

Two experts whom China Daily interviewed said the measures are being used to suppress China's economic advance under a catch-all claim of national security or military concerns.

Jack Midgley, principal of the global consultancy Midgley &Co in Washington, said: "Look at the whole body, the US economic measures directed at China, from the Huawei restrictions to the current outbound investment restrictions, the declared purpose is to protect American national security.

"That's the declared purpose. The challenge here is that we're trying to solve a complicated problem with simple measures."

Huawei Technologies Co Ltd, for its part, plans a full return to the 5G smartphone industry by the end of this year, research companies say, after a US ban on equipment sales decimated its consumer electronics business.

Huawei should be able to procure its own 5G chips domestically using its own advances in semiconductor design tools along with chipmaking from Semiconductor Manufacturing International Co, Reuters cited three third-party technology research companies covering China's smartphone sector as saying.

A return to the 5G phone market would mark a victory for Huawei, which for almost three years had been in survival mode. Huawei's consumer business revenue peaked at 483 billion yuan ($67 billion) in 2020, before falling by almost 50 percent a year later.

The Shenzhen-based company once vied with Apple and Samsung to be the world's top handset maker until US restrictions beginning in 2019 cut its access to chipmaking tools essential for producing its most advanced models.

Midgley said that 30 or 50 years ago military technology and civilian technology were easy to distinguish, so early national security protections by the US focused on strategic materials or the export of or investment in weapons manufacturing.

Over the past 20 years that has all changed.

"Now there's very little difference between advanced military technology and advanced civilian technology," he said, citing supercomputers, artificial intelligence and advanced sensors that can be used in both medical and military applications.

Communications systems, such as 5G networks and other advanced communications technologies, can be applied in military settings to help with command and control, he said.

"Or they can be used in civilian settings to help people live better. Military and civilian technologies have converged."

Something else that has changed is that China can now make many of those technologies itself. So when military and civilian technologies are the same, and where China has a strong established capability, using sanctions does not stop the Chinese side from advancing, he said.

"It doesn't give any real protection to the US. And it damages the political and economic relationship between the two countries."

The stated reason for sanctions is to protect US national security, he said.

"But that brush is so broad that it covers almost all (technologies)."

Irreversible development

The Huawei booth is seen at the Consumer Electronic Show, an influential technology event, in Las Vegas, Nevada, on Jan 8, 2019. ZHANG SHUO/CHINA NEWS SERVICE

It is time for the US to recognize that China's technological development is irreversible, and that the appropriate goal for policy is to put rules and laws in place so that both sides can invest and benefit from their own technology, he said.

"We're not doing that today. We're not building institutions for economic cooperation. We're not building laws and rules with the Chinese side. We're just hitting with sanctions. And I think ultimately that policy will fail."

Sourabh Gupta, senior fellow at the Institute for China-American Studies in Washington, said, "The (Joe) Biden administration says that it is doing all these technology denials and controls from a purely national security and military perspective, but that is not entirely true."

True purpose

The purpose is to deny China's access to high technologies, many of which have commercial applications, or have only commercial applications or have dual-use applications, he said.

"And the technological rise has both a military dimension and a civilian dimension."

The US aims to capture a larger range of sectors and technologies that will not aid China's technological rise and growth, Gupta said.

"And most of those are in commercial areas."

The US export controls are like a "reverse CFIUS", he said.

CFIUS, the Committee on Foreign Investment in the United States, is "an interagency committee authorized to review certain transactions involving foreign investment in the United States and certain real estate transactions by foreign persons, in order to determine the effect of such transactions on the national security of the United States", says the website of the US Treasury, which oversees CFIUS.

CFIUS includes representatives of 16 US departments and agencies, including Defense, State, Commerce and Homeland Security. Certain White House offices observe and take part, if needed.

"The United States government is making rules with regard to outbound investment … there's hardly been any measure (in US history) along these lines, ever," Gupta said.

Specific application

"It is going to be written in very generalized terms, but it will have very specific application to sectors and to countries of concern, China being right at the top of them.

"This is going to block the outbound investment in certain dual-use technologies and items headed to China. So it kind of parallels the export control process.

"It's just about trying to place blocks on capital in terms of investing, not just in terms of exporting products, but even exporting capital in areas that the US deems to be a threat to its national security."

Azhar Azam, in an article for the Beirut-based news website Almayadeen in June, described what he sees as the US objective: "The goal is unambiguously to simultaneously bring key Beijing trade partners under the US orbit, alienate and rally them against China, forge a coordinated response to Beijing's 'economic coercion', reinstate the US-led economic order and revitalize the 'post-Cold War decade' of high economic growth, massive job creation and dramatic foreign direct investment surge.

"Economic coercion is generally defined in the US as the threat or imposition of economic costs by a state with the objective to extract policy concessions and advance geopolitical objectives.

"The same definition applies to (the US), which through tariffs and technology curbs on Chinese goods and companies — and pressurizing Europe into following its lead — has declared 'economic warfare' against China with the aim to 'slow' Beijing's development but (that) will have 'huge geopolitical consequences'."

The US has imposed unilateral economic sanctions on nearly 40 countries, affecting almost half of the world's population.

By fiscal year 2021 the US had more than 9,400 sanctions in effect, according to the Brookings Institution, a research organization in Washington.

Gregory C. Allen, director of the Wadhwani Center for AI and Advanced Technologies at the Center for Strategic and International Studies in Washington, said the key is to "understand that the US wanted to impact China's AI industry", referring to the Oct 7 export controls, The New York Times reported. "The semiconductor stuff is the means to that end.

"The new policy embodied in Oct 7 is: Not only are we not going to allow China to progress any further technologically, we are going to actively reverse their current state of the art," Allen said.

C.J. Muse, a senior semiconductor analyst at the US research company Evercore ISI, told The New York Times, "If you'd told me about these rules five years ago, I would've told you that's an act of war — we'd have to be at war."

Agencies contributed to this story.