Matthew Reynolds, a fellow at the Center for Strategic and International Studies (CSIS), said that in responding to China's actions towards Micron, the U.S should be reserved, focusing on the larger goal of exposing China's aggressive foreign business tactics. He said this in a commentary published on June 22.
According to Reynolds’ commentary on the CSIS website, on May 21, the “Cyberspace Administration of China” concluded that U.S. semiconductor company Micron Technology did not pass its cybersecurity inspection. As a result, they ordered China's critical infrastructure operators to stop buying Micron's products. The commentary says that while some U.S. observers and officials see this move as China's covert reprisal for recent U.S. restrictions on China's access to advanced semiconductor tech, the situation could be more intricate, necessitating a more sophisticated approach from Washington.
"The United States should instead exercise equanimity in its response," Reynolds said. "Diplomatic efforts should focus on drawing attention to the opaque and capricious manner in which China targets foreign firms, rather than on convincing South Korea to prevent backfilling. This will increase the costs on China for its use of economic coercion by countering Beijing’s narrative that it is open for foreign business."
Reynolds says that the “October 7 controls,” a comprehensive set of export regulations on advanced semiconductors and their manufacturing equipment, was introduced by the Biden administration. These regulations would affect semiconductor trade with China. However, Reynolds explains that other nations would need to adopt similar restrictions in order to eliminate the potential for foreign companies to meet China's demands instead. While Japan and the Netherlands have already implemented similar restrictions, South Korea, a key player in the semiconductor supply chain, has yet to follow. This discrepancy presents a significant challenge for the effectiveness of the October 7 controls.
U.S. policymakers might consider retaliating against China's CAC action or putting pressure on South Korea to prevent Micron's competitors from meeting its customer's demand, according to Reynolds. However, such responses, Reynold’s explains, could inadvertently aid China's goal of hindering U.S. efforts to form an alliance aimed at limiting China's access to semiconductor technology.
According to his bio page on the Center for Strategic and International Studies (CSIS) website, Reynolds, an Economics Program fellow at CSIS, formerly served in several Capitol Hill staff roles such as legislative assistant. He holds an MA in international economics and China studies from Johns Hopkins University, a BA in international relations from Creighton University.
