American “Digital Curtain” to Isolate China

Abstract

The Biden administration openly declares Washington’s intention to “play offense, act more aggressively” against China, which, in its opinion, is an “unfriendly” country and pursues a policy of “military-civilian fusion” aimed at undermining American production and national security. In accordance with the doctrine of “precision decoupling”, the desire to “actively strangle large segments of the Chinese technology industry” becomes a priority instrument of pressure on China and is put above the commercial interests of American companies and concerns about the possible diplomatic or economic consequences of these steps. Subsidies, tax incentives, as well as regulations obliging American enterprises to use local raw materials, components and parts become the main instruments of competition designed to “put an end” to US dependence on imports of semiconductor products. The possibility of extending restrictions on the sale of almost any equipment containing at least a small proportion of American technologies is being studied. The actions of the Biden administration are based on the presumption of the existence of an insurmountable gap in the scientific and technical power of the United States and China. However, an objective analysis of the existing global economic relations in the semiconductor industry indicates a high degree of dependence of this industry in the United States on the state of cooperation with firms in China, Taiwan and South Korea. A radical restructuring of supply and logistics chains can lead to an increase in production costs and, ultimately, to disruptions in the US manufacturing sector. Despite the sanctions, China aims to increase its share in the semiconductor technology market and intends to concentrate resources on original and innovative scientific and technical research to pursue a course towards self-sufficiency.