10 June 2024

China Is Losing the Chip War

Michael Schuman

In an April phone conversation, Chinese leader Xi Jinping issued a stern admonition to President Joe Biden. Washington’s ban on the export of American advanced microchips and other sanctions designed “to suppress China’s trade and technology development” are “creating risks.” If Biden “is adamant on containing China’s high-tech development,” the official Chinese readout went on, Beijing “is not going to sit back and watch.”

Biden has been robust in his response. The ban, he told Xi, was necessary to protect American national security. “He said, ‘Why?’” Biden recently recounted. “I said, ‘Because you use it for all the wrong reasons, so you’re not going to get those advanced computer chips.’”

Imagine for a moment how humiliating that exchange must have been for Xi Jinping. Xi is not supposed to suffer such indignities. His propaganda machine portrays him as an all-knowing sage who will lead China to a new era of global greatness. His word is practically law, and such a warning as he gave Biden would have induced fear and obedience among his compatriots. Yet the American leader not only stood firm; he even went on to lecture the Chinese dictator.

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