China: Manufacturers should make use of all legal means

Huawei's boss asserts that China's chip production is making progress. Xi Jinping wants to exploit all opportunities for market access.

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For the first time since 2018, Chinese President Xi Jinping organized a symposium together with the Chinese tech elite. Among those present were the heads of Huawei, Xiaomi and BYD.

The symposium highlights the close ties between the Chinese government and companies. Xi Jinping reiterated to the CEOs: "Whatever is determined by the Party Central Committee should be implemented resolutely and without compromise."

In return, the President promises companies protection: "The legitimate rights and interests of private enterprises and private entrepreneurs must be effectively protected in accordance with the law."

The National Development and Reform Commission (NDRC) and other departments are currently revising the regulations on market access. In future, the following should apply: "Everything that is not prohibited is permitted." This is intended to strengthen "fair access to competitive infrastructure sectors, important national scientific research infrastructures and other areas".

Broadly interpreted, the statements could also be applied to the procurement of sanctioned hardware. The USA prohibits AMD and Nvidia from selling their fastest AI accelerators to China. The USA is apparently currently investigating whether Chinese hyperscalers are procuring Nvidia GPUs on a large scale via Singapore. Grey market imports would be one way of circumventing the export restrictions.

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The parties involved confirm that China is well on the way to becoming independent of the West. Huawei CEO Ren Zhengfei believes that China is moving away from the "lack of core and soul". According to the news agency Reuters, the statement refers to a metaphor from 1999, when a minister equated "core" with semiconductors and "soul" with operating systems.

Huawei and the chip contract manufacturer SMIC in particular are currently driving forward local chip production. SMIC can produce chips with 7-nanometer structures, but is currently facing a wall due to a lack of modern lithography systems. The global market leader ASML, for example, is not allowed to sell machines with extreme ultraviolet (EUV) exposure technology to China. On the software side , Huawei is decoupling itself from Google's Android world with HarmonyOS.

The Chinese newspaper People's Daily mainly reported on the event. All relevant excerpts can be found in an English-language blog.

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This article was originally published in German. It was translated with technical assistance and editorially reviewed before publication.