China says US subsidies, tax incentives for domestic chip sector discriminatory

US offers substantial subsidies and tax breaks to domestic chip sector, enticing firms to leave China for America

BEIJING:

In response to the recent US moves on the chip sector, China's Ministry of Commerce (MOC) said the United States has overstretched the concept of national security, abused export controls and disrupted the global semiconductor industry chains.

The United States has been providing huge subsidies and tax incentives to its domestic chip sector, and some measures have been forcing companies to abandon China and choose the United States, which are discriminatory and have violated market laws and international economic and trade rules, distorting the global semiconductor industry chain, MOC spokesperson He Yadong said on Thursday.

The semiconductor sector is highly globalised after decades of development and this is the combined effects of resources endowment of different countries and market laws, he said.

China is committed to promoting high-level opening up and welcomes global semiconductor firms to invest in China and boost the healthy development of the global semiconductor industry chain, he noted.

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In response to the US Department of Commerce considering adding several Chinese chip companies related to Huawei to the sanctions list, he said China has always opposed politicising and weaponizing economic, trade, and technological issues, but in recent years, the United States has abused export controls, unjustly sanctioned and suppressed Chinese enterprises, and seriously disrupted the global industrial and supply chains.

If the United States imposes sanctions on more Chinese companies along with persisting suppression of Huawei, citing so-called connections, this will be a typical economic bullying practice, violating international economic and trade rules, and damaging the global economic and trade order, he said.

While urging the United States not to adopt wrong practices, the spokesperson said China will take necessary measures to safeguard the legitimate rights and interests of its enterprises.