On May 21, 2023, the Chinese Communist Party’s cybersecurity regulatory agency announced that the U.S. semiconductor giant Micron Technology failed to pass the national security review. The picture shows a building of Micron in Shanghai. (Hector Retamal/AFP via Getty Images)
[The Epoch Times, November 03, 2023](Comprehensive report by Epoch Times reporter Li Yan) As China’s economy is sluggish, the CCP’s regulatory crackdowns are erratic, and foreign companies continue to divest, Wang Wentao, the Minister of Commerce of the CCP, and the president of Micron Technology Inc. During the meeting, Wang Wentao said that Beijing welcomes the American semiconductor company to “take root and develop deeply” in the Chinese market.
Micron is the largest memory chip (wafer) manufacturer in the United States and one of the three giants in the global DRAM memory chip market, along with South Korea’s Samsung Electronics and SK Hynix.
On May 21, the CCP announced that it would ban China’s critical information infrastructure operators from purchasing Micron chips on the grounds of network security. Beijing’s actions against Micron are widely seen as retaliation for U.S. restrictions on China’s access to key chip products and technology.
A short statement issued by the Ministry of Commerce of the Communist Party of China on Friday (November 3) stated that Minister of Commerce Wang Wentao reported to Micron Technology President and CEO Sanjay Mehrotra at a meeting on November 1 ) stated that China will optimize the foreign investment environment and provide service guarantees for foreign-invested enterprises.
“We welcome Micron Technology to continue to take root and delve deeply into the Chinese market.” Wang Wentao said that the premise is to comply with the laws and regulations of the Chinese Communist Party.
When the Cyberspace Administration of China (CAC) announced the ban on Micron chips half a year ago, it stated that Micron products had relatively serious potential network security issues. But no details were given.
After being banned by the CCP, Micron Chief Financial Officer Mark Murphy said that based on the company’s current assessment, the impact of the CCP ban on Micron only accounts for single digits in the company’s total revenue.
After the United States imposed the heaviest chip restrictions in history against the CCP in October last year, it upgraded it again on October 17 this year. The Biden administration announced that day that it planned to stop providing advanced artificial intelligence chips designed by companies such as Nvidia to China, and blacklisted two Chinese chip designers, Moore Thread and Biren.
U.S. Commerce Secretary Gina Raimondo said the new measures closed loopholes in last October’s regulations and that the move would likely be updated “at least annually.”
Amid geopolitical tensions, China’s economic downturn, and erratic regulatory crackdowns by the CCP, foreign capital is continuing to withdraw from China.
Just days before the CCP officially announced a ban on Micron chips, Micron said it planned to invest up to 500 billion yen ($3.7 billion) in Japan to develop extreme ultraviolet chip technology, becoming the first chip manufacturer to introduce extreme ultraviolet light technology to Japan. Japan is working to revitalize its chip industry, while the United States is increasingly urging its allies to jointly counter China’s chip and advanced technology development to curb China’s military development.
Although the CCP’s ban may benefit Micron’s main competitors, South Korea’s Samsung Electronics and SK Hynix, in the short term, the Financial Times reported on April 23 that the White House has announced that the CCP may ban Micron from selling chips in China. The South Korean government is asked to urge South Korean chip manufacturers not to fill any gaps in the Chinese chip market. This is another sign that the United States is rallying its allies to counter China’s economic coercion.
China’s State Administration of Foreign Exchange said on Friday that direct investment liabilities in China’s balance of payments fell by $11.8 billion in the third quarter. This is the first time that this indicator of foreign investment in China has turned negative since records began in 1998.
This indicator captures currency flows related to foreign entities in China. Economists say the decline in foreign direct investment shown by balance of payments indicators reflects a weakening willingness of foreign companies to reinvest profits in China.
Bloomberg reported that Duncan Wrigley, chief China economist at Pantheon Macroeconomics, said, “This may reflect foreign companies repatriating earnings from China that they previously reinvested. “
“International businesses, especially U.S. businesses, have been reconfiguring supply chains to use alternatives outside of China,” Wrigley added.
The Communist Party of China views investment from international companies as key to economic upgrading and has stepped up efforts to attract foreign investors this year. Chinese Communist Party leader Xi Jinping met with Microsoft co-founder Bill Gates in Beijing in June.
Reuters reported that Wang Wentao and Mehrotra met on Wednesday as recent tensions between Washington and Beijing appeared to have eased. Officials from the two countries are working hard to facilitate a meeting between U.S. President Joe Biden and Chinese Communist Party leader Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco later this month.
Editor in charge: Lin Yan#
Tags: foreign investment continues withdraw China CCP suddenly blocks Micron Chips Wafers Semiconductors
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