China Urges Cease in Purchasing Micron Technology Products, Escalating Technology and Security Dispute with the United States
In an effort to intensify its ongoing dispute with Washington over technology and security concerns, the Chinese government has called on owners of sensitive computer equipment to refrain from purchasing goods from Micron Technology Inc., the largest U.S. memory chipmaker.
The Cyberspace Administration of China released a statement on its website, asserting that Micron products pose “serious network security risks” to China’s information infrastructure and national security without providing specific details. The agency urged operators of critical information infrastructure to halt procurement from Micron.
As the United States, Europe, and Japan continue to restrict Chinese access to advanced chipmaking and other technology, citing potential weaponization concerns, China’s government, under President Xi Jinping, has exhibited heightened assertiveness towards neighboring countries and threats against Taiwan.
While Chinese officials have warned of unspecified consequences, they face challenges in formulating retaliatory measures that do not harm China’s smartphone manufacturers, other industries, and efforts to develop domestic processor chip suppliers.
China recently initiated a review of Micron in line with the country’s increasingly stringent information security laws, shortly after Japan joined the United States in imposing restrictions on Chinese technology access based on security grounds for processor chip manufacturing.
Foreign companies have expressed unease due to police raids on consulting firms such as Bain & Co., Capvision, and Mintz Group, which have been accompanied by limited explanations from Chinese authorities. These companies have been informed of their obligation to comply with the law.
Both business groups and the U.S. government have called for clear explanations regarding the expanded legal restrictions on information and their enforcement.
The announcement made on Sunday appears to aim at reassuring foreign companies, stating that China is committed to high-level openness and welcomes enterprises, products, and services from various countries in compliance with Chinese laws and regulations.
Despite accusations from President Xi in March that Washington is impeding China’s progress, Beijing has been cautious in its retaliatory actions, likely to prevent disruption to Chinese industries responsible for the majority of global smartphone, tablet computer, and consumer electronics assembly. These industries rely heavily on more than $300 billion worth of foreign chip imports each year.
China is making significant investments to accelerate its chip development capabilities and reduce dependence on foreign technology. While Chinese foundries can supply lower-end chips for automobiles and home appliances, they are currently unable to meet the demands of smartphones, artificial intelligence, and other advanced applications.
The escalating conflict has raised concerns of a potential decoupling between regions, resulting in separate technology standards that would hinder interoperability between computers, smartphones, and other products, leading to increased costs and hindered innovation.
U.S.-Chinese relations are currently at their lowest point in decades, fueled by disagreements on security, China’s treatment of Hong Kong and Muslim ethnic minorities, territorial disputes, and China’s substantial trade surpluses with the United States.