The United States will implement sweeping new restrictions on semiconductor exports to China starting Monday, targeting 140 Chinese firms to curb Beijing’s technological advancements, especially in AI and military applications. The measures, part of the Biden administration’s continued crackdown on China’s chip industry, include export controls on high-bandwidth memory (HBM) chips, 24 chipmaking tools, and advanced semiconductor equipment manufactured in countries like Singapore and Malaysia.
Among the companies affected are major Chinese chip equipment makers such as Naura Technology Group and Piotech, alongside firms tied to Huawei, which remains central to China’s chipmaking ambitions. Nearly two dozen additional semiconductor and investment firms will be added to the US Entity List, severely restricting their access to American technology. In response, Chinese officials criticised the move, claiming it undermines global trade and supply chains while vowing to protect their firms’ interests.
The restrictions also expand the foreign direct product rule, giving the US authority to regulate exports to China of equipment containing even minimal American technology. This move could disrupt global suppliers, although Japan and the Netherlands are exempt due to their collaboration with the US on similar controls. The crackdown follows a broader US strategy to limit China’s ability to compete in advanced technologies, building on export curbs introduced in 2022.
Despite China’s efforts to become self-reliant in semiconductors, it remains years behind global leaders like Nvidia and ASML. Meanwhile, the restrictions are expected to hit companies such as Lam Research, Applied Materials, and Samsung, which derives a significant share of its HBM chip revenue from China. With the upcoming administration of Donald Trump expected to maintain a hardline stance on China, the latest measures underscore ongoing US efforts to preserve its technological edge.
China has issued a strong warning against potential new US export restrictions on semiconductor technology, signalling it could take ‘necessary actions’ to safeguard its firms. The warning follows reports suggesting the Biden administration may expand its trade blacklist, potentially adding up to 200 Chinese chip companies to the list. Such measures would limit US suppliers from trading with these firms.
Chinese commerce ministry spokesperson He Yadong condemned the US for what he described as overreach in the name of national security. He argued the proposed controls destabilise global trade and harm bilateral cooperation in the semiconductor sector. He emphasised China’s determination to defend its companies’ rights if the US persists with its actions.
Reports indicate that the Biden administration is mulling restrictions on semiconductor equipment and AI memory chip sales to China. These measures may target firms like Semiconductor Manufacturing International Corp., a Huawei ally, while sparing ChangXin Memory Technologies, a rising AI memory chip developer.
The tensions come as the outgoing Biden administration faces domestic and international scrutiny over trade policies. Meanwhile, there is concern that President-elect Donald Trump’s proposed tariffs on Chinese goods could further inflame trade relations, with Beijing warning that such measures would fail to address US domestic issues effectively.
European chip equipment stocks surged on Thursday following reports that upcoming US restrictions on China’s semiconductor industry might be less stringent than anticipated. Shares of ASML, a leading supplier of semiconductor tools, rose by 4.3%, while competitors BE Semiconductor and ASM International climbed 5% and 2.9%, respectively, outperforming the STOXX 600 index.
According to Bloomberg, the US may exclude Chinese memory chipmaker ChangXin Memory Technologies (CXMT) from its trade restrictions, though details remain uncertain. The US Commerce Department, which oversees export rules, is expected to release updated guidance after Thanksgiving.
ASML, which has seen a sharp decline in sales to China over recent quarters, declined to comment. The company previously projected that sales to China would shrink to 20% of its revenue by 2025, down from nearly half in the last 18 months. Other global semiconductor equipment suppliers, including US-based Applied Materials and Tokyo Electron, are also closely monitoring the situation.
Chinese robotaxi firm Pony AI secured $260 million in a US IPO, valuing the startup at $4.55 billion. This marks a resurgence in US investor confidence for Chinese tech companies, with the IPO reflecting renewed interest in autonomous driving technologies despite ongoing geopolitical tensions.
The company’s move follows a period of uncertainty for Chinese firms in US markets, notably after Didi Global’s delisting. Regulatory disputes between China and the US have eased, bolstering opportunities for companies like Pony AI. However, the robotaxi sector faces challenges, including public concerns about autonomous vehicles’ safety, data privacy, and stiff competition from rivals such as Tesla, which plans to launch similar services in the US next year.
Pony AI sold 20 million American depositary shares at $13 each and raised an additional $153.4 million through private placements. Backed by Toyota, the company’s valuation has declined from $8.5 billion two years ago, highlighting the competitive and uncertain nature of the market. Analysts note widespread robotaxi adoption may take years due to safety and reliability hurdles.
The IPO follows a trend of other Chinese firms, including Zeekr and WeRide, also going public in the US. While Pony AI’s operations in the US remain limited, its public listing underscores growing investor interest in technology startups despite profitability challenges and intense market competition.
South Korea announced plans to provide 14 trillion won ($10 billion) in low-interest loans next year to support its chip sector amid growing competition from China and uncertainty over US trade policies under President-elect Donald Trump. The funds, managed by state-run banks, will include 1.8 trillion won for infrastructure like power lines at a new high-tech chip complex in Yongin and Pyeongtaek, designed to attract advanced chipmakers.
The government highlighted challenges posed by rapid advancements in China’s semiconductor industry and potential changes to US policies like the Inflation Reduction Act and Chips Act, which could alter global trade incentives. Trump has also pledged new tariffs on goods from China, Mexico, and Canada, raising additional concerns for South Korean exporters.
While South Korea leads in memory chip manufacturing through giants like Samsung Electronics and SK Hynix, it faces setbacks in chip design and contract manufacturing, where rivals are gaining ground. The government vowed to use all available resources to help the industry overcome its current challenges and maintain global competitiveness.
Samsung Electronics made significant leadership changes on Wednesday, aiming to strengthen its position in the competitive AI chip market. Semiconductor chief Jun Young-hyun was named co-CEO, gaining direct control of the struggling memory chip business, while US chip head Han Jin-man was promoted to lead the foundry division. The moves reflect Samsung’s strategy to address declining profits and regain its edge against rivals SK Hynix and Taiwan’s TSMC.
The reshuffle comes amid growing investor concerns over Samsung’s lagging performance in AI chip supply, particularly to key client Nvidia. Samsung’s semiconductor profits dropped sharply in the third quarter, attributed to delays with a major customer. Despite some progress since, analysts remain sceptical about the leadership structure, with Chung Hyun-ho retaining his influential role in the Business Support Task Force.
Chairman Jay Y. Lee acknowledged public and investor concerns during a hearing this week, emphasising the need to navigate business uncertainty and intensifying competition, particularly from Chinese chipmakers. Samsung hopes the leadership overhaul will drive innovation and stabilise its chip business in a rapidly evolving market.
Chinese big tech companies have emerged as some of the most influential players in the global technology landscape, driving innovation and shaping industries across the board. These companies are deeply entrenched in everyday life in China, offering a wide range of services and products that span e-commerce, social media, gaming, cloud computing, ΑΙ, and telecommunications. Their influence is not confined to China, they also play a significant role in global markets, often competing directly with US tech giants.
The rivalry between China and the US has become one of the defining geopolitical struggles of the 21st century. This competition oscillates between cooperation, fierce competition, and confrontation, influenced by regulatory policies, national security concerns, and shifting political priorities. The geopolitical pendulum of China-US tech firms, totally independent from the US election outcome, reflects the broader tensions between the two powers, with profound implications for global tech industries, innovation, and market dynamics.
The Golden Shield Project
In 2000, under Chairman Jiang Zemin’s leadership, China launched the Golden Shield Project to control media and information flow within the country. The initiative aimed to safeguard national security and restrict the influence of Western propaganda. As part of the Golden Shield, many American tech giants such as Google, Facebook, and Netflix were blocked by the Great Firewall for not complying with China’s data regulations, while companies like Microsoft and LinkedIn were allowed to operate.
At the same time, China’s internet user base grew dramatically, reaching 800 million netizens by 2018, with 98% using mobile devices. This rapid expansion provided a fertile ground for Chinese tech firms, which thrived without significant competition from foreign players. Among the earliest beneficiaries of this system were the BATX companies, which capitalised on China’s evolving internet landscape and rapidly established a dominant presence in the market.
The powerhouses of Chinese tech
The major Chinese tech companies, often referred to as the Big Tech of China, include Alibaba Group, Tencent, Baidu, ByteDance, Huawei, Xiaomi, JD.com, Meituan, Pinduoduo, and Didi Chuxing.
Alibaba Group is a global e-commerce and technology conglomerate, operating platforms such as Taobao and Tmall for e-commerce, AliExpress for international retail, and Alipay for digital payments. The company also has significant investments in cloud computing with Alibaba Cloud and logistics.
Tencent, a massive tech conglomerate, is known for its social media and entertainment services. It owns WeChat, a widely used messaging app that offers payment services, social media features, and more. Tencent also has investments in gaming, owning major stakes in Riot Games, Epic Games, and Activision Blizzard, as well as interests in financial services and cloud computing.
Baidu, often called China’s Google, is a leading search engine provider. In addition to its search services, Baidu has a strong presence in AI development, autonomous driving, and cloud computing, particularly focusing on natural language processing and autonomous vehicles.
ByteDance, the company behind TikTok, has made a name for itself in short-form video content and AI-driven platforms. It also operates Douyin, the Chinese version of TikTok, along with Toutiao, a popular news aggregation platform. ByteDance has expanded into gaming, e-commerce, and other AI technologies.
Huawei is a global leader in telecommunications equipment and consumer electronics, particularly smartphones and 5G infrastructure. The company is deeply involved in cloud computing and AI, despite facing significant geopolitical challenges.
Xiaomi is a leading smartphone manufacturer that also produces smart home devices, wearables, and a wide range of consumer electronics. The company is growing rapidly in the Internet of Things (IoT) space and AI-driven products.
JD.com, one of China’s largest e-commerce platforms, operates similarly to Alibaba, focusing on direct sales, logistics, and tech solutions. JD.com has also made significant strides in robotics, AI, and logistics technology.
Meituan is best known for its food delivery and local services platform, offering everything from restaurant reservations to hotel bookings. The company also operates in sectors like bike-sharing, travel, and ride-hailing.
Pinduoduo has rapidly grown in e-commerce by focusing on group buying and social commerce, particularly targeting lower-tier cities and rural markets in China. The platform offers discounted products to users who buy in groups.
Didi Chuxing is China’s dominant ride-hailing service, offering various transportation services such as ride-hailing, car rentals, and autonomous driving technology.
But what are the BATX companies we mentioned earlier?
BAXT
The term BATX refers to a group of the four dominant Chinese tech companies: Baidu, Alibaba, Tencent, and Xiaomi. These companies are central to China’s technology landscape and are often compared to the US “FAANG” group (Facebook, Apple, Amazon, Netflix, Google) because of their major influence across a range of industries, including e-commerce, search engines, social media, gaming, ΑΙ and telecommunications. Together, BATX companies are key players in shaping China’s tech ecosystem and have a significant impact on global markets.
China’s strategy for tech growth
China’s technology development strategy has proven effective in propelling the country to the forefront of several high-tech industries. This ambitious approach, which involves broad investments across both large state-owned enterprises and smaller private startups, has fostered significant innovation and created a competitive business environment. As a result, it has the potential to serve as a model for other countries looking to stimulate tech growth.
A key driver of China’s success is its diverse investment strategy, supported by government-led initiatives like the “Made in China 2025” and the “Thousand Talents Plan“. These programs offer financial backing and attract top talent from around the globe. This inclusive approach has helped China rapidly emerge as a global leader in fields like AI, robotics, and semiconductors. However, critics argue that the strategy may be overly aggressive, potentially stifling competition and innovation.
Some have raised concerns that China’s government support unfairly favours domestic companies, providing subsidies and other advantages that foreign competitors do not receive. Yet, this type of protectionist approach is not unique to China; other countries have implemented similar strategies to foster the growth of their own industries.
Another critique is that China’s broad investment model may encourage risky ventures and the subsidising of failures, potentially leading to a market that is oversaturated with unprofitable businesses. While this criticism holds merit in some cases, the overall success of China’s strategy in cultivating a dynamic and competitive tech landscape remains evident.
Looking ahead, China’s technology development strategy is likely to continue evolving. As the country strengthens its position on the global stage, it may become more selective in its investments, focusing on firms with the potential for global leadership.
In any case, China’s strategy has shown it can drive innovation and foster growth. Other nations hoping to advance their technological sectors should take note of this model and consider implementing similar policies to enhance their own competitive and innovative business environments.
But under what regulatory framework does Chinese tech policy ultimately operate? How does it affect the whole project? Are there some negative effects of the tight state grip?
China’s regulatory pyramid: Balancing control and consequences
China’s regulatory approach to its booming tech sector is defined by a precarious balance of authority, enforcement, and market response. Angela Zhang, author of High Wire: How China Regulates Big Tech and Governs Its Economy, proposes a “dynamic pyramid model” to explain the system’s intricate dynamics. This model highlights three key features: hierarchy, volatility, and fragility.
The top-down structure of China’s regulatory system is a hallmark of its hierarchy. Regulatory agencies act based on directives from centralised leadership, creating a paradox. In the absence of clear signals, agencies exhibit inaction, allowing industries to flourish unchecked. Conversely, when leadership calls for stricter oversight, regulators often overreach. A prime example of this is the drastic shift in 2020 when China moved from years of leniency toward its tech giants to implementing sweeping crackdowns on firms like Alibaba and Tencent.
This erratic enforcement underscores the volatility of the system. Chinese tech regulation is characterised by cycles of lax oversight followed by abrupt crackdowns, driven by shifts in political priorities. The 2020 – 2022 crackdown, which involved antitrust investigations and record-breaking fines, sent shockwaves through markets, wiping out billions in market value. While the government eased its stance in 2022, the uncertainty created by such pendulum swings has left investors wary, with many viewing the Chinese market as unpredictable and risky.
Despite its intentions to address pressing issues like antitrust violations and data security, China’s heavy-handed regulatory approach often results in fragility. Rapid interventions can undermine confidence, stifle innovation, and damage the very sectors the government seeks to strengthen. Years of lax oversight exacerbate challenges, leaving regulators with steep issues to address and markets vulnerable to overcorrection.
This model offers a lens into the broader governance dynamics in China. The system’s centralised control and reactive policies aim to maintain stability but often generate unintended economic consequences. As Chinese tech firms look to expand overseas amid domestic challenges, the long-term impact of these regulatory cycles remains uncertain, potentially influencing China’s ability to compete on the global stage.
The battle for tech supremacy between the USA and China
The incoming US President Donald Trump is expected to adopt a more aggressive, unilateral approach to counter China’s technological growth, drawing on his history of quick, broad measures such as tariffs. Under his leadership, the USA is likely to expand export controls and impose tougher sanctions on Chinese tech firms. Trump’s advisors predict a significant push to add more companies to the US Entity List, which restricts US firms from selling to blacklisted companies. His administration might focus on using tariffs (potentially up to 60% on Chinese imports) and export controls to pressure China, even if it strains relations with international allies.
The escalating tensions have been further complicated by China’s retaliatory actions. In response to US export controls, China has targeted American companies like Micron Technology and imposed its own restrictions on essential materials for chipmaking and electric vehicle production. These moves highlight the interconnectedness of both economies, with the US still reliant on China for critical resources such as rare earth elements, which are vital for both technology and defence.
This intensifying technological conflict reflects broader concerns over data security, military dominance, and leadership in AI and semiconductors. As both nations aim to protect their strategic interests, the tech war is set to continue evolving, with major consequences for global supply chains, innovation, and the international balance of power in technology.
The White House has engaged leading United States telecommunications executives in a high-level meeting to address a significant cyber-espionage campaign allegedly linked to China. National Security Adviser Jake Sullivan and Deputy Adviser Anne Neuberger hosted the meeting, seeking industry insights and strengthening government-private sector partnerships to counteract future cyber threats.
Earlier this month, US authorities disclosed that hackers, purportedly linked to China, accessed surveillance data meant for law enforcement by breaching multiple telecom companies. Senator Mark Warner described the breach as the ‘worst telecom hack in our nation’s history.’
Though the identities of the companies and executives involved remain undisclosed, the meeting underscores the urgency of cybersecurity improvements amid escalating threats from state-sponsored actors. While China has categorically denied involvement, the incident amplifies concerns over Beijing’s alleged cyber activities targeting critical US infrastructure.
The discussions aim to establish better safeguards against sophisticated attacks, reinforcing collaboration between federal agencies and the telecom sector to bolster national cyber resilience.
Huawei has launched its Mate 70 smartphone series, signalling a major step in its comeback to premium devices while showcasing HarmonyOS NEXT, its Android-free operating system. Priced from 5,499 yuan ($758), the Mate 70 challenges Apple’s iPhone 16 in China, boasting features like satellite paging, an advanced processor, and a 40% performance boost over previous models.
HarmonyOS NEXT represents Huawei’s bid for software independence after US export restrictions cut off access to Google services. The company announced that all new devices starting in 2025 will run the new system, while current Mate 70 users can choose between HarmonyOS 4.3 (Android-compatible) and the new HarmonyOS NEXT 5.0. Despite this shift, Huawei has retained Android compatibility as a backup while growing its app ecosystem, which already includes 15,000 applications.
The Mate 70 also highlights China’s advancing chipmaking capabilities, reportedly featuring SMIC-produced Kirin 9100 processors in higher-end models. This achievement underscores Huawei’s resilience despite ongoing US export controls and the addition of Chinese firms to trade blacklists. Huawei’s rebound is reflected in its rising market share, now ranked as China’s second-largest smartphone vendor with over 10 million units shipped in recent quarters.
The launch of the Mate 70 marks Huawei’s increasing competition with Apple and other global players in the world’s largest smartphone market, fueled by patriotic support for its technological breakthroughs.
According to Morgan Adamski, executive director of US Cyber Command, Chinese hackers are embedding themselves in US critical infrastructure IT networks to prepare for a potential conflict with the United States. He announced that China-linked cyber operations aim to secure strategic advantages in the event of a major clash.
These operations involve compromising key networks and positioning themselves to execute disruptive attacks. Examples include manipulating heating, ventilation, and air conditioning (HVAC) systems in server rooms or disrupting vital energy and water controls, officials said earlier this year.
Speaking at the Cyberwarcon security conference in Arlington, Virginia, Adamski emphasised the scale of the threat, noting that the US government has launched globally coordinated efforts to counter these operations. These efforts include offensive and defensive measures designed to degrade and disrupt China’s cyber activities worldwide. Actions range from exposing cyber campaigns to imposing sanctions and issuing cybersecurity advisories, with support from allied nations.
Earlier, US Senator Mark Warner described a suspected China-linked cyberespionage campaign, dubbed ‘Salt Typhoon,’ as the worst telecommunications hack in US history. Beijing has repeatedly denied conducting cyberattacks on US entities.
