In the midst of the trade war between Washington and Beijing, US lawmaker has demanded action against Chinese chip making firm named Changxin Memory Technologies (CMX). This was seen as a retaliatory action after China banned the sale of chips by US Company named Micron Technology Inc. MU.O. Mike Gallagher, who has demanded this action, is an influential lawmaker and has compelled the Biden administration to take a tough stance on China.
Not only this, the White House also asked President Yoon Suk Yeol of South Korea to not fill market gaps in China after the ban on Micron as South Korea’s Samsung and SK Hynix are one of the three big companies in memory chips alongside America’s Micron.
Chip war between USA and China
Increasing mutual suspicion, distrust and geopolitical tensions has led to a trade war between the world’s two largest economies. US want to prevent China from obtaining or producing advanced semiconductors and at the same time, it wants to reduce its dependence on China. It is quite evident that the entire world is dependent on Beijing as the country has become the world’s largest manufacturing hub.
China is also a crucial part of the global supply chain and therefore, the US is trying its best to isolate it from the rest of the world.
Growing tensions between China and the West
The rivalry between USA and China has given rise to a bitter trade war, with both the countries imposing tariffs on billions of dollars’ worth of one another goods. Both the countries accuse each other of unfair trading practices and intellectual property theft. It is generally believed that US wants to curtail China’s rise as a global economic power.
With growing tensions between both the countries, this trade war is gradually getting transformed into a Cold war.
America’s intervention in the South China Sea, its claims of human right violations in Chinese region of Xinjiang and China’s support to Russia during the Ukraine war, all of this point towards the deteriorating relationship between China and the US. Tensions between Beijing and Europe are also simmering after China’s ambassador questioned the legal status of former Soviet nations like Estonia, Latvia and Lithuania.
Implications of the trade war for India
As the trade war between both the countries continues, India could present itself as an alternative to China and boost its manufacturing industry especially the semiconductor industry. Semiconductors require advanced manufacturing capabilities and are used in almost all devices from remotes to mobile phones. Taiwan is a leader in manufacturing semiconductors and advanced chips. India could take a cue from Taiwan and start investing in this technology to become the next world leader.
India has already launched its Semiconductor Mission with a total outlay of Rs. 76,000 crores. It has also announced a $10 billion incentive plan to boost semiconductor manufacturing.
However, the ongoing trade war between Washington and Beijing could have serious implications for the world’s economy. Therefore, it remains to be seen that how the two big superpowers come together to resolve this problem instead of complicating it.
