The Ministry of Commerce of China declared on Friday that the United States should abandon zero-sum thinking and continue to eliminate a series of unjustified economic and trade restrictions against China, according to China’s state news agency Xinhua.Â
A spokesperson for the ministry noted that China has observed the United States’ recent initiative to announce the approval of Nvidia’s H20 chip sales to China. The spokesperson added that following economic and trade talks in London, both sides have maintained close communication, confirming the framework’s details established there and moving forward with its implementation.
According to the spokesperson, China has approved qualified export applications for controlled items in accordance with the law, and the United States, as a result, lifted relevant restrictions on China in early July, as had been discussed during the talks. The spokesperson affirmed that win-win cooperation is the correct course for China and the United States, while suppression and containment lead nowhere.
Unfair market practices
The spokesperson noted that in May of this year, the United States issued export control guidelines targeting Huawei’s Ascend chips, imposing stricter controls on Chinese chip products based on unwarranted allegations. These actions interfered with fair market competition through administrative power and severely undermined the legitimate rights and interests of Chinese enterprises. “China has solemnly stated its position and firmly opposes this.”
The spokesperson expressed China’s expectation that the United States will cooperate with China in the same direction, engage in equal consultations, and correct its mistaken practices. This would help to foster a favorable environment for mutually beneficial cooperation between businesses of both countries and to jointly protect the stability of global semiconductor production and supply chains.
Cooperation with Nvidia
Chinese Commerce Minister Wang Wentao met with Nvidia CEO Jensen Huang on Thursday. Wang conveyed that China’s policy on attracting foreign investment will remain unchanged, and its door will only open wider. Wang also mentioned that China has an immense market scale, diverse application scenarios, and dynamic innovation and creativity. He expressed the hope that multinational companies, including Nvidia, will provide high-quality and reliable products and services to Chinese customers. Huang noted that the Chinese market is highly attractive, and Nvidia is willing to deepen cooperation with Chinese partners in the field of artificial intelligence.
 Targeting advanced AI chips
China and the United States have been engaged in a multi-faceted trade and technology dispute for several years, with semiconductors emerging as a primary flashpoint. The U.S. has justified its export controls by citing national security concerns, specifically aiming to prevent China from acquiring advanced chips that could be used to enhance its military modernization, artificial intelligence capabilities, and supercomputing. These restrictions are part of a broader strategy to maintain a technological lead over China.
The core of the U.S. export controls, first implemented in October 2022 and expanded in 2023, is the prohibition of selling cutting-edge AI chips and the semiconductor manufacturing equipment required to produce them. The most powerful AI chips, such as Nvidia’s A100 and H100, were placed under these restrictions. In response, Nvidia developed less powerful, “watered-down” variants specifically for the Chinese market, including the H20 chip mentioned in the article. However, even these chips faced subsequent restrictions, as the U.S. sought to close potential loopholes.
The situation with Huawei is a separate but related element of this dispute. Since being added to the U.S. Department of Commerce’s Entity List in 2019, Huawei has been largely cut off from American technology and components. The U.S. alleged that Huawei was engaged in activities contrary to its national security and foreign policy interests. Placement on the Entity List effectively means that U.S. companies are prohibited from selling goods and technology to the listed entity without a difficult-to-obtain license. This has severely impacted Huawei’s ability to produce its own advanced chips, including its Ascend series, and has become a central point of contention in the bilateral relationship.
