Last October, around the same time that Washington effectively declared tech war China introduction of severe restrictions on technology export processors to Chinese industry, in Germany there was a mini-civil war: between the Minister of Finance and his allies of the Ministries of Defense, Foreign Affairs and the Interior on the one hand and German Chancellor Olaf Scholz on the other, who, using his power, imposed his will. At stake was the acquisition of a container terminal in the port of Hamburg by the Chinese company Cosco Shipping Ports.

Although Mr. Salts finally approved the takeover, it is clear that much of the German political world belatedly became suspicious of Chinese industrial encroachment on Germany’s strategically important infrastructure and German high-tech industry. The civil war within Germany’s ruling coalition was, however, to some extent a microcosm of dichotomies that divide her countries even more widely. EUROPEAN UNION. on the sensitive issue of China, whether it be the intrusion of Chinese capital, the investment of Chinese industry in critical infrastructure in Europe, or Beijing’s efforts to acquire the latest know-how in high-tech microprocessors.

The Chairman of the Commission seems to have sought to close this gap, or rather to retreat to one camp in order to protect Europe from Chinese invasion. Ursula von der Leyenduring the week when he emphasized that “strengthening European policy towards China requires greater coordination between member states and European institutions.”

In a word, its president commission called for unity and mobilization against China and its strategy of superiority in the field of high-tech processors, and through it, geopolitical dominance.

Ms von der Leyen’s proposals for an EU strategy against China include, among other things, a mechanism that would control European companies’ exports and investments abroad on the basis of “whether they serve our interests.” And in order not to give the impression that she is once again being drawn into the chariot of Washington and drawn into a tug-of-war with Beijing, Ms von der Leyen reiterated in a different wording that what is required of Europe is not its separation from China, but the elimination of risk in its relationship with the second world economy.

However, it is clear that the war of processors and technologies is beginning to go beyond the rivalry between the two largest economies on the planet, whose relations are at their worst since 1979. The processor war is becoming global, as gradually, and sometimes imperceptibly, more and more countries take up combat positions and unite their majority on the side of the strong, i.e. superpowers.

About a month ago, the Netherlands announced a ban on the export of processor technologies to China, and now within a week Japan has followed suit, announcing special controls on the export of equipment for the production of 23 types of processors.

Bell World Bank.

Criticism comes from many quarters and concerns not only the technological war between Washington and Beijing, but also the global scale of the war of processors. In a week The World Bank warned that the technological separation of the world’s two largest economies and the imposition of restrictions on each side is undermining innovation in both the US and China and “shrinking the supply of knowledge around the world.” Referring to its patent licensing study, the World Bank highlighted how the measures taken by Washington and Beijing since 2018 have hurt business innovation in both countries. And this, he stressed, undermines the economic growth that has been observed in the countries of the Asia-Pacific region in recent decades.

As for the aggressive position that the EU, in particular, is beginning to take. On China, criticism came from Chinese Ambassador to the EU Fu Kong, who cited increased protectionism in Europe and urged Europeans and European governments to “see what’s in their interest and resist growing pressure from the US.”

The imposition of restrictions from either side undermines innovation in both the US and China and “shrinks the supply of knowledge worldwide.”

Essentially attributing the EU’s attitude In a sort of thrall to Washington, the Chinese ambassador urged European countries to develop “strategic autonomy” and expressed hope that the EU would find “courage and political strength” to proceed with the ratification of the mutual investment agreement with China. This is an agreement reached by the EU. in 2020 and greatly disturbing Washington, which at the time was urging European support in the confrontation with the Asian economic giant. This agreement, however, has been “frozen” since 2021, and, as the president of the Commission stressed this week, she will not give consent to its ratification, since “both the world and China have changed since then.”

In the United States, after all, militant sentiments towards China are not limited to the aggressive initiatives of the Biden administration. This past weekend, Beijing hosted the China Development Forum, an annual gathering of Western business leaders and meetings with China’s leading figures. For the first time in 25 years, it turned out that the majority of US companies do not consider China as their investment priority.

Beijing counterattacks to stimulate industry

Criticizing the Dutch, who first decided to ban the export of processor technology to China, Chinese Ambassador Fu Kong urged them “to keep in mind that China is not going to sit back and see its interests undermined without taking some action.” China is fighting back and is not content with retaliation, measures and sanctions. He is strongly strengthening the Chinese processor industry, which is making progress in its desire to become independent of American technology.

Chinese YMTC is testing Chinese-made processor equipment.

As such, China’s largest memory processor maker, YMTC, is expected to open its new plant early next year despite being embargoed by Washington in October. It initially froze a facility it was preparing in the central Chinese city of Wuhan, which has been repeatedly accused of supplying Chinese telecommunications giant Huawei. Thus, Apple’s order for a series of memory processors for the new generation of iPhone mobile phones has been cancelled.

However, YMTC has been testing Chinese-made processor hardware for some time and says it is now much more optimistic that it can now rely much more on domestic hardware and parts. According to the Financial Times, YMTC’s success in reducing its reliance on the US and other processor-producing countries shows that Washington is failing in its attempts to block or at least significantly slow China’s progress in manufacturing. . Thus, by 2024, the Chinese industry is expected to regain its competitiveness against other major industry players such as South Korean Samsung and American Micron, its main competitors.

The growth of YMTC, no doubt with the help of Beijing, is evident and reflected in its global market share: in 2021 it held 5% of the global memory microprocessor market, while just a year earlier, in 2020, it was no more than 1%. The company’s own February data documents show that YMTC received $7 billion in government investment funds after Washington imposed its latest restrictions on microprocessor equipment exports. However, it is clear that he is now making a dynamic comeback. As the British newspaper points out, the critical moment will come when it tries to increase production of 3D Nand memory microprocessors, which, however, are about two generations behind in technology compared to corresponding products from Samsung, Hynix and Micron.

von der Leyen

Trying to differentiate the position of the EU. from Washington over its rivalry with China, the President of the Commission emphasized that the Europeans “do not want to cut off our economic, social, political and scientific ties”, but at the same time indicated that the EU should develop “protective mechanisms” to protect itself from Chinese invasion.

Highlighting the danger of a growing tug-of-war between the world’s two largest economies where microprocessor technology is at stake, the World Bank warned that “bilateral restrictions on technology transfer and cooperation between countries could reduce the supply of knowledge and know-how around the world. “.