Beijing stole a page from Washington’s playbook last month by effectively instituting its own chip ban, with Chinese companies now discouraged from purchasing Nvidia’s AI chips. The bold, calculated move has surely rattled Trump administration officials, with their assumptions about China needing American technology.
Indeed, the move suggests US President Donald Trump has little leverage. His desperation was on full display last Friday, with his threats to impose an additional 100 per cent tariffs on China and pull out of a meeting with President Xi Jinping at this month’s Asia-Pacific Economic Cooperation summit in Seoul.
The US’ futile attempts to block Chinese access to advanced technology have only fuelled China’s drive for technological independence. Since Trump first took office, Washington has tried to thwart China by blacklisting Chinese tech companies and restricting their access to advanced semiconductor manufacturing equipment. The US is now seeking to ban the purchase of Chinese-made drones and other products deemed critical to American national security.
Chinese companies have demonstrated stoic resilience in the face of Trump’s ire. Telecommunications giant Huawei Technologies was considered all but dead when Washington began restricting its purchases of US technology in 2019. But by shifting towards domestic technology and spending more on research and development, Huawei has made a remarkable recovery – even reclaiming the top spot in China’s smartphone market.
More recently, the United States has focused on containing China’s artificial intelligence advances. But Chinese start-up DeepSeek shocked the world with the launch of a home-grown AI large language model built at a fraction of the cost of US rivals like ChatGPT. DeepSeek announced in August that it would be using Chinese-made chips in a new model. So much for crippling China’s AI prowess.
To be sure, experts reckon China is still about five years behind global leaders in high-volume manufacturing of leading-edge chips. Yet with Beijing’s curbs on Nvidia chips, it must believe that Chinese chipmakers are not far from fully catching up.
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