On Wednesday, China had criticized a USA law to encourage the processor chip production in the US and would cut down reliance on Asian suppliers as a threat to trade and an attack on Chinese business. This week, the law that was signed by President Joe Biden guarantees $52 billion in grants and alternative aid to investors in US chip factories. Therefore, it responds partially to warnings that supplies may be disrupted if China attacks Taiwan that would produce up to 90 percent of high-end chips. China's ruling Communist Party had claimed the self-ruled island as a part of its territory.

HIGHLIGHTS
China criticized a USA law to encourage the processor chip production in the US
The pandemic had hampered the production of products from smartphones to autos
The CHIPS and Science Act would spend total about $200 billion over ten years

Wang Wenbin, the Foreign Ministry spokesperson had mentioned that the measure would “disrupt international trade and destort international semiconductor supply chains.” The spokesperson added “China firmly opposes that.”

Wang has mentioned that the parts of the law “restrict companies' normal investment and economic and trade activities in China.”

Disruption in chip supplies following the coronavirus pandemic had hampered the production of products from smartphones to autos and it had highlighted the world's reliance on Taiwanese chips and Chinese factories that would assemble most electronic devices.

Well, the fears of disruption were heightened by Chinese threats to attack Taiwan that would split with the mainland in 1949 after a civil war.

Last week, Beijing had launched military drills around the island in retaliation for a visit by the Speaker Nancy Pelosi of the United States House of Representatives. China would believe on the visits by American officials to Taiwan which may encourage its leaders to form its de facto independence permanent, a step according to the mainland which would lead to war.

As per Congressional Budget Office, the “CHIPS and Science Act” called for research spending that would total about $200 billion over ten years.

The Communist Party has spent around tens of billions of dollars in developing China's own chip production industry. Its factories would make low-end chips for autos and alternative product but it could not supply high-end smartphones and alternative devices.

Also Read: In Competition with China, Joe Biden Signs Chip Bill to Boost Semiconductor Manufacturing