Key Points:
- China opposes the MATCH Act, which aims to stop Chinese companies from making advanced artificial intelligence chips.
- Chinese officials summoned American diplomats and prepared a new Malicious Entity List to fight the proposed rules.
- The House Foreign Affairs Committee advanced the legislation with a strong 36-8 vote late last month.
- President Donald Trump and Chinese President Xi Jinping will likely discuss the trade dispute during their upcoming meeting in Beijing.
China is fighting hard against proposed American legislation targeting its semiconductor industry. The new rules aim to slow down Chinese progress in the global artificial intelligence race. Beijing feels deeply concerned about these early moves and plans to raise the issue soon. Officials will likely discuss the proposal, called the MATCH Act, this week in Beijing. The talks will happen right alongside a highly anticipated meeting between United States President Donald Trump and Chinese President Xi Jinping.
For several months, the Trump administration held off on creating new technology export rules for China. The White House paused these actions despite having real national security concerns. However, the United States Congress decided to fill that gap and take action. Lawmakers introduced legislation in both the House of Representatives and the Senate last month. The bill aims to make it much harder for Chinese chipmakers to produce artificial intelligence semiconductors. It achieves this by creating systems that pressure allied nations to stop selling equipment to China.
This aggressive legislative move angered Chinese officials. They publicly criticized the bill and quickly prepared countermeasures to use if the law passes. A person familiar with the situation said that Chinese leaders summoned American embassy diplomats in China to lodge a formal complaint about the proposed legislation. These actions show exactly how seriously Beijing treats the situation.
In April, the Chinese Ministry of Commerce took another unusual step. According to another source, the ministry invited representatives of the American chip industry to the Chinese embassy in Washington. The groups met to discuss various semiconductor topics, including the specific details of the MATCH Act. The source declined to share the names of the specific companies that attended the embassy meeting.
Ryan Fedasiuk, a former adviser for United States and China affairs at the State Department, expects the bill to become a major talking point in Beijing this week. Fedasiuk explained that Congress knows the United States needs to win the artificial intelligence race against China. He also noted that Beijing completely understands its own chipmaking industry remains extremely vulnerable to American export controls.
The upcoming summit marks the first face-to-face meeting between the two leaders since their countries agreed to a fragile trade truce in South Korea last year. While other major topics will dominate the spotlight, sources confirmed that Chinese officials already brought up the chip bill during pre-summit planning meetings. The White House currently refuses to take a public stance on the proposed legislation. A White House official declined to comment on the bill on Friday and refused to say if Trump would bring it up in Beijing. The official stated they simply do not get ahead of the president on pending legislation.
Representatives for the Chinese embassy in Washington also declined to comment on diplomatic meetings regarding the bill. However, Chinese officials remain very vocal in public since Congress introduced the bill last month. The government already revealed the specific countermeasures it will use if the bill actually becomes law. Embassy spokesperson Liu Pengyu told reporters early last month that the United States uses fake excuses to force other countries into joining a technological blockade against China.
The Chinese Ministry of Commerce added its own warnings after the House Foreign Affairs Committee advanced the MATCH Act and other related tech bills on April 22. A ministry spokesperson said that passing these bills into law would severely ruin the international economic and trade order. The spokesperson promised that China will decisively take necessary measures to protect the lawful rights of Chinese businesses.
China has already created a legal tool to fight American regulations like the MATCH Act. On April 13, the government issued a new decree. This rule allows China to punish anyone who promotes or implements unfair foreign rules by placing them on a Malicious Entity List. The new decree also opens the door for Chinese companies to take legal action against foreign tech suppliers.
The MATCH Act specifically tries to stop countries from selling vital chipmaking equipment to China. The bill targets critical technology from the United States, Japan, and the Netherlands. These three countries currently dominate the global market for chip manufacturing machines. The draft legislation warns foreign countries to limit their exports within months. If they refuse, the United States will step in and impose strict controls. The bill also requires companies to obtain special licenses just to service the machines they already sold.
Netherlands-based ASML completely dominates the global supply of deep ultraviolet immersion lithography machines. Industry experts view the company as a primary target of the new legislation. The company faces significant risks and new restrictions if it wants to continue selling products in the Chinese market. People also see Japanese equipment maker Tokyo Electron squarely in the bill’s crosshairs. Both companies declined to offer any immediate comments regarding the situation.
Despite global pushback, the MATCH Act continues to advance in Washington. The House Foreign Affairs Committee passed the bill with a 36-8 vote late last month. Lawmakers revised the draft legislation multiple times after hearing from corporate lobbyists. Reports from last month showed that Micron, the largest memory chipmaker in the United States, acted as a major driving force behind the bill.
