West’s ‘tit-for-tat’ claim in Micron review shows double standards

West’s ‘tit-for-tat’ claim in Micron review shows double standards

Decision won’t affect domestic memory chip supply as ‘made-in-China’ replacement is ready

It’s ironic that China’s announcement that US memory chip giant Micron Technology failed to pass its review instantly sparked complaints from some Western media outlets and speculation of “tit-for-tat”, experts said on Monday, pointing out that certain Western countries are judging others by their own values as they are used to cracking down on Chinese companies based on groundless accusations.

The attacks came soon after China made public the results of its cybersecurity review of Micron, saying the company didn’t pass because it has severe cybersecurity problems that could pose significant security risks to China’s critical information infrastructure supply chain.

The review, conducted by China’s Cybersecurity Review Office (CRO) on Micron’s products sold in China since the end of March, found that Micron’s products negatively affect China’s national security, according to a statement published on the website of the Cyberspace Administration of China.

As a result, the authorities demanded that China’s domestic critical information infrastructure operators stop purchasing Micron products in accordance with the country’s Cybersecurity Law and other regulations.

The review results were revealed shortly after Micron named its new general manager for China. The company also revealed recently that it planned to invest up to 500 billion yen ($3.6 billion) in Japan over the next few years.

Mao Ning, a spokesperson of China’s Foreign Ministry, said that the review is aimed at preventing products from endangering the safety of China’s critical information infrastructure, and is a necessary measure to safeguard China’s national security.

Two sets of standards

Some foreign officials and media outlets have automatically linked the decision to the tensions between Beijing and Washington.

A Reuters report cited a spokesperson from the US Commerce Department as saying that the action is inconsistent with China’s assertions of opening up markets and being committed to a transparent regulatory framework.  A Financial Times report noted that the Micron incident “looks like tit-for-tat from the outside”.

Earlier, some foreign media cited the news that Chinese police recently questioned staff from US management consultancy Bain & Company’s office in Shanghai as evidence that China is stepping up retaliatory action.

Experts criticized Western countries for applying double standards, as US officials or media rarely accused the US government of targeting China when they launched groundless sanctions against Chinese companies in recent years.

“This is a typical US double standard approach. The most significant difference between the US’ reviews and China’s recent review is that we are talking about evidence instead of baseless accusations,” Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Monday.

Ma Jihua, a veteran technology analyst, told the Global Times on Monday that the US has been citing national security as a reason for various reviews of different Chinese companies over the years, while adding them to its entity list, so the US “is not qualified” to say anything about China’s review.

The US government has gone to great lengths to hobble China’s technological rise in recent years, using multiple methods such as putting Chinese semiconductor companies on trade black lists and thwarting Chinese tech companies’ business in the US. Last October, the US also imposed sweeping export restrictions on shipments of chip making tools to China in a bid to prevent it from developing its chip industry.

According to Gao, the timing of the review gives Western media some room for speculation that China is imposing so-called sanctions on the US. But China has always sought a balance between security and development, and will be decisive on anything that concerns national security, which has nothing to do with the current US-China dispute.

The Group of Seven (G7) countries jointly sent out a tough message against China during the recent G7 summit, as heads of the world’s wealthiest nations said they will seek to address the challenges posed by China’s non-market policies and practices and economic coercion.

Both officials and experts have stressed that Micron’s failure to pass China’s cybersecurity review should not be interpreted as a signal that China is wavering in its opening-up policies.

“Companies and platforms are welcome to introduce products and services into the Chinese market as long as they conform to the requirements of Chinese laws and regulations,” the aforementioned statement said.

Gao also noted that if Micron can improve its products in a timely manner, it can still be accepted by the Chinese market. “The review is also a good opportunity for companies to improve the quality of their products,” he noted.

Domestic capacity

Experts also stressed that the incident is unlikely to trigger too much fluctuation in China’s memory chip supply, as its memory chip manufacturing capacity has progressed significantly in recent years, so any gap left by overseas chip makers can be quickly filled by domestic companies.

Chen Jia, a veteran macro economy observer, told the Global Times on Monday that China’s memory chip plants are now capable of ensuring stable supplies and product prices even if overseas companies opt out of the Chinese market.

“Nowadays, China’s memory chip sector can achieve almost 100 percent localization, while domestic companies only need to strengthen stability in certain high-end production lines,” he said.

This is reflected in the fact that overseas memory chip giants’ market share in China has already been squeezed in recent years amid the rise of domestic replacements. According to Chen, Micron earned about 11 percent of its annual global sales from China in 2022, down from a peak of about 60 percent.

Ma also said that as China has the ability to produce memory chips to replace overseas supplies, overseas companies’ withdrawal from the country will bring opportunities to domestic firms.

“As Micron’s market share in China is shrinking, whether South Korea and other foreign manufacturers will make up for the vacuum left by Micron in the Chinese chip market remains to be seen,” he said.

At present, about 30 percent of memory chips are made by domestic companies. If South Korean companies and the US decide to withdraw from the Chinese market, Chinese companies have the ability to quickly fill the market, Ma said.

A number of mainland memory chip stocks surged on Monday. Shares of Fuzhou-based Raynen touched the trading limit of 10 percent, while Shenzhen Techwinsemi Technology Co saw shares rise by 6.31 percent on Monday.

(Global Times)

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