US Imposes More Restrictions On China, & China Will Tax Those Who Don't Use Chinese Chips

In another turbulent week, US lawmakers have introduced more restrictions against the use of Chinese telecommunication equipment, and China has pushed for manufacturers to use 100% Chinese-sourced parts. What challenges has China presented to the world, what has the US brought in, and could the recent COVID protests finally spark a change in China?

What challenges has China (Xi Jinping) presented to the world?

Over the past few years, tensions between China (aka Xi Jinping) and the US have continued to sour, and from an outsider’s perspective, it could easily be argued to be solely caused by US action. From China’s point of view, all it wants is access to the latest chips, to be able to manufacture electronics for the world and to have control over its own internal affairs. But as my mother always taught me, there is your truth, my truth, and the actual truth, which lies somewhere in the middle.

While it is true that the vast majority of Chinese manufacturers want to provide products to the world and make a living, simply saying that the US has been the sole instigator over the past few years is short-sighted and dangerous. To start, China has made numerous threats and intentions to invade Taiwan, which is one of the world’s most important suppliers of semiconductors, and while invasions, in general, are problematic, China having access to Taiwanese facilities would be damaging to world security for numerous reasons. 

The first reason comes from the fact that China has, for many years, interfered with manufacturing processes to integrate surveillance software and chips used by governments and companies around the world. For example, servers used in the US were found to have miniature chips integrated into their design that have been suspected as allowing backdoor access, and these chips could only have been integrated during their manufacture in China. A second example comes from the African Union, which was found to be riddled with spying equipment and backdoors into servers that allowed Chinese spies to access data and monitor conversations.

China has also been integrating AI and other technologies for mass surveillance of its population, and this has been leveraged to create social credit scores that restrict individual freedoms based on their behaviour ins society and their support for the ruling party. This introduces challenges for the rest of the world in that Chinese hardware and software will be geared towards a lack of privacy, backdoor access, and government data collection. This is why many are worried about popular social apps such as TikTok, which despite having excellent algorithms, could be used as a tool to either spy or launch cyberattacks from. 

This only scratches the surface of the challenges that China poses to the world and doesn’t even include China’s continuous manufacturing of illegal artificial islands, which it claims are sovereign soil, using its economy to intimidate and trap other nations in debt, and the numerous attempts to purchase Western companies. But it should be stated very clearly that the actions of China are a result of its ruling party, the CCP, which is effectively run by Xi Jinping, who acts as a de-facto ruler for life (i.e., a dictator).

Why has the US introduced additional bans against Chinese hardware?

Recently, the US announced that it has introduced further bans against Chinese telecommunications hardware in an effort to further strengthen cybersecurity. Specifically, the introduced bans prevent importing hardware considered a threat to national security, and companies affected include (but are not limited to) Huawei and ZTE. At the same time, the ban also prevents companies that provide video surveillance equipment, including security cameras, which is likely to prevent remote access via potential backdoors.

Previously, the US has banned equipment from Huawei and others from being used in government infrastructure as well as telecommunications, but this new ban may also limit access to Chinese hardware by citizens. Of course, there will be those that will suffer economic consequences from this action as Chinese hardware is typically cheaper than Western devices, but by introducing such limitations, potentially dodgy Chinese hardware cannot be used. 

At the same time, China may introduce new laws that require Chinese manufacturers to use 100% Chinese-sourced parts. While these suggestions are only that, it is likely that China will introduce such quotas by looking forward in order to secure its own supply chain from Western interference while simultaneously giving the Chinese government full access to hardware.

Could the recent COVID protests change the future of China?

While it may not seem related, the recent protests in China (caused by the deaths of 10 people in a building fire under COVID lockdown) could very well spark a new era in China that would not only help the population but possibly the world. During the early 2000s, China’s economy was quickly growing, and the adoption of capitalism not only helped to bring millions out of poverty but also enabled China to become a serious player in the world. However, Xi Jinping (likely driven by ideas of grandeur) decided to increase the use of surveillance and population control measures to secure his power after 2010 and ever since has worked towards becoming China’s supreme ruler. 

Just like how every other dictatorship fails, it comes as no surprise that the more controls Xi Jinping tries to introduce, the more difficulties the country faces. This was especially true with electronics now that his actions have directly led to the US banning Chinese hardware and access to next-generation devices.

However, Xi Jinping’s biggest mistake could very well be the key to his demise and, hopefully, the CCP; COVID lockdowns. Long story short, while the rest of the world no longer enforces lockdowns (or even testing), China continues its zero-COVID policy, which has resulted in the deaths of 10 people under lockdown in an apartment as it caught fire. In retaliation, many thousands of people across China have taken to the streets to show their disgust at Xi Jinping, and the signs they show are nothing more than a blank piece of paper which demonstrates just how bad freedom of speech and thought has become in China. 

If the protests escalate, it is very possible that Xi Jinping could be faced with tough choices: try to silence the demonstrations through force or please the crowds. Knowing how every other dictator works in these scenarios, we will likely escalate the situation from his side, which could result in a dangerous level of instability. If the protesters win and Xi Jinping is forced from his position, there is a chance that China could enter a new era where it moves away from its communist history in favour of a more open China that puts its energy and resources into the betterment of humanity instead of isolationism. In this case, the electronics world would also see a dramatic shift as hardware from China could once again be trusted, the world’s largest manufacturer would become more accessible, and the West would finally be able to work with China instead of against it.