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Following President-elect Trump’s announcement of his plan to impose an additional 10% tax on Chinese goods, the Ministry of Finance (MOF) of the People’s Republic of China (PRC) issued a document granting domestically produced goods a 20% price assessment. opportunity in government procurement. According to DigiTimes Asia, although the move was a response to America’s planned import tariffs, it will affect all non-Chinese products, making them less competitive with domestic products.
However, although this 20% advantage applies to anything produced within China, the MOF proposal focuses on industrial production, except for agriculture, forestry, animal husbandry, fishery products, and minerals. Experts also say that the law is aimed at American products sold in China, which could affect other major chipmakers, such as Intel and Nvidia. This is especially true as China remains one of the largest markets despite the many and ever-increasing sanctions that the US has imposed on Beijing.
The call to focus more on domestically produced products, especially in the chip sector, is not limited to the PRC government. Some of China’s major industry associations, including the Internet Society of China, the China Semiconductor Industry Association, the China Association of Automotive Manufacturers, and the China Association of Communications Enterprises, have all called on Chinese companies to reduce their reliance on American-made chips and prioritize them instead. domestic products or increase cooperation with international partners. The China Semiconductor Industry Association has already published an article saying, “US chip products are no longer safe and reliable, and the Chinese industry should buy American chips wisely.”
All these movements seem to be motivated by Washington’s expansion. While many Chinese firms say the sanctions will not stop China’s chip industry, the Chinese government is still dealing with its own export restrictions, especially in rare metals. Apart from that, many Chinese firms are continuing their development to replace the prescribed products. While they have not yet mastered it when it comes to the latest semiconductor technology, they have made strides and leaps in trying to catch up with the West.