“Disruptive changes” are what an analyst predicted might happen in the US technology industry if Republicans win control of Congress in the midterm elections.
In an effort to appeal to people who see China as a danger to national and job security, both Republican and Democratic candidates are promising a stern approach toward the said nation.
However, based on a report by CNBC, the Republicans are more likely to adopt an aggressive attitude.
The Stance on China
During an appearance on CNBC’s Squawk Box Asia on Wednesday, Nov. 9, Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics, was asked how the outcome of the midterm election might affect the relationship between the US and China.
He said that when it comes to taking a firm stance on China, Republicans and Democrats are in total agreement. But he also claimed that they are “less aligned on getting multilateral partners to agree [on the stance toward China].”
“A lot of Republicans think that is a waste of time. They may just want to go with it alone, but then that creates a lot of friction with the US allies and might lead to more dislocative, disruptive changes in the tech policies,” said Chorzempa, who mentioned “techno-nationalism” as a contentious subject.
Related Article: US Looks to Expand Tech Bans on China to AI and Quantum Computing
Semiconductor Export Restrictions
A month ago, the US imposed export restrictions that would limit the flow of some kinds of innovative semiconductor chips into China, curbing the access of Chinese businesses to essential technology.
To sell some sophisticated computer chips or associated manufacturing equipment in China, companies using American tools will need a license.
According to Chorzempa, the Conflict between the US and China is pushing corporations in opposite ways and possibly fracturing the global Internet firms who want to do business in both nations.
From another perspective, The Guardian reported last month that the US had limited the supply of advanced computer chips to China to boost measures that restrict Beijing’s tech and military aspirations. It aims to shut off China’s access to crucial technologies used in sophisticated computers and weaponry.
The trade war between the world’s two largest economies has escalated with the ban, which is the most substantial measure taken by Washington against Beijing on technology exports in decades, based on the report.
Who Might Benefit
Natixis, a research group, suggests that a Republican victory in Congress might be good for Taiwan and South Korea semiconductor manufacturers.
“Increasingly, we are seeing this tougher approach from the US, especially from the Republicans, with greater scrutiny of supply chain in tech, especially high tech,” said Natixis’ Senior Economist Gary Ng on CNBC’s Squawk Box Asia.
He added that the pressure would only continue to build as time passed.
Ng argued that limiting Chinese competition would benefit Taiwanese and, eventually, Korean and Japanese semiconductor manufacturers.
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Written by Trisha Kae Andrada
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