Beijing's decision to prohibit Micron Technology Inc, an American company, from supplying memory chips to major Chinese industries has intensified the trade dispute with Washington, causing the stocks of companies that could gain from this decision to rise.
China's cyberspace regulator stated on Sunday night that Micron, the largest American memory chip manufacturer, did not pass its cybersecurity assessment. As a result, the regulator will prohibit key infrastructure providers from purchasing from the firm, as reported by Reuters.
The report did not give any specific information about the risks or products that were affected. Experts believe that Micron will not be directly impacted since its primary clients in China are consumer electronics companies. However, this decision may lead some businesses to avoid using Micron products due to political concerns.
Washington disagreed with Beijing's choice, but it had a positive impact on the shares of Micron's competitors in China and South Korea. These companies are expected to profit as Chinese companies look to purchase memory products from alternative suppliers.
Chinese Government's Actions Towards US Companies
The relationship between the United States and China has become more strained in the past few months, mainly because of the Chinese government's actions towards American companies such as Mintz Group and Bain, in which Chinese authorities have conducted searches and inspections on these companies.
Micron has announced that it has received a review from Chinese regulators and is eager to keep discussing with them. This comes after the Chinese government targeted Micron as the first American chipmaker to be affected by export controls by the US government, which aimed to prevent certain American components and chipmaking tools from being used to enhance China's military capabilities.
In late March, China started a review process due to a disagreement about chip technology and the worsening relationship between Beijing and Washington. The review coincides with the recent agreement by the Group of Seven nations to reduce risk but not separate from economic ties with China and US President Joe Biden's call for communication between the two countries through an "open hotline."
Not a Geopolitical Issue
The Chinese government and state media claim that the Micron decision should not be viewed as a geopolitical issue but rather as an isolated case related to national security concerns. However, a well-known Chinese commentator, Hu Xijin, expressed a different view. He tweeted that the US encourages its companies to take actions that could threaten China's national security, leading to suspicion of Chinese companies doing the same. He suggests that the entire world should be cautious of the US.
The Growing Tension Between US and China
The tension between the United States and China has been escalating in recent years, particularly with regard to trade and technology. The two countries have been engaged in a bitter dispute over intellectual property rights, which has led to numerous lawsuits and investigations on both sides.
In addition to its review of Micron, the Chinese government has also targeted other American tech companies such as Apple, Google, Microsoft, and Qualcomm. Beijing's actions are seen by many as a way of exerting pressure on these companies to comply with its policies or risk losing access to China's lucrative market.
Concerns about cyber security threats from China further complicate the situation. US officials have accused Chinese hackers of stealing sensitive information from American corporations and government agencies for years now. This has led some experts to suggest that Washington needs stronger measures against Beijing than just export controls on specific technologies or inspections at certain firms.
Despite these challenges facing their relationship currently, there seems little option but for continued dialogue if matters don't escalate beyond control given how important each nation is economically for one another, even though it must be said they differ fundamentally regarding governance systems, amongst other things.
Related article : US-China 'Conflict and Confrontation' Inevitable, Bejing's New Foreign Minister Warns
