of the 19 sixty's was a period of change around the world, including the middle east and north africa. we dreamed of a fire in democratic society. we dream different revolution. the 1st of a 3 part series out as a well exclusive regional events, people and forces to check the deck in our dreams were many. we started with great dreams, which ended up with sense the 2nd time the sixty's in the, our politics on now to sierra the last couple months is enforcing new restrictions on exports of semiconductors, of china. beijing says the united states has behind the move. so how will this impact china as high tech competitions? could it prevent the country from developing its own chip industry? this is inside story, the

hello welcome to the program. i'm adrian said again semi conduct. the chips are a vital component to and everything from smartphones to cause and even ministry hardware. china has been looking to insure it supplies, but it's now facing a major problem. the netherlands is coping exports of a central technology used to manufacture the most advanced chips. china says it's part of a campaign by the us to undermine its economy. we'll go to a panel in just a few moments, but 1st, a report from phantom on. china is tech admissions has hit a roadblock. it's been building up its semi conductor sector, making computer chips that are vital to its economy and military plans. but new rules and the netherlands could to private of a central technology needs to make the most advanced chips. as the does trade minister said the restrictions were imposed on national security grounds without mentioning any country, but china believes the u. s. is behind the move so you can send things may fall. so

what china has always opposed the us generalization of the concept of national security, abuse of export controls and using various excuses to control or collect other countries to engage in science and technology blockade against china. what did the mattress do? us impose sweeping restrictions on semi conductor exports to china during the past year. president joe biden says the moves aren't aimed at china. it's called of me, but at the top military technology that threatens the interest of the us and its allies. at the same time, washington is investing billions of dollars and building up its own domestic chip plants, growing high tech rivalry between the us and china, shaking your global supply chains and pressure appears to be growing on key players to take sides. bids. monahan, how to 0 so let's bring it, i guess,

for today's discussion from brussels, we're joined by steven. oh, i got, who is the chief diplomatic, corresponded in europe for the new york times from townsend wisconsin. is that really benson director of the project on trade and technology at the center for strategic and international studies, added brisbin were joined by work powell as professor at queensland university of technology, a warm welcome to you. we'll work. let's start with you. the top government says that it introduce this legislation due to national security concerns. all those concerns legit to those didn't come to those conclusions independently. ok, so you're going to place all of these into a pool. the frame. um, the frame is basically a pronouncement by, by president, by the in early march, 2021. when he made it very clear that from his point of view, china was not going to become the wealthiest or the leading nation in the world on, excuse, watch, unless congress, that there has been a full court press,

progressively thing designed amounted to put a tile on its ability to pose a risk on that particular calculus. the result was that the, you had time to view the high technology was a critical piece of the diesel puzzle. under control, china's rise and its ability to challenge the appeal, the position of the us as a leader in the world. it had to stop to mobilize each allies to implement the full corporate office. and this is exactly what's happening right now. and it's on surprise. see that it's, you were being alive, progressively, i'm the beginning of the line. i really would you, would you agree with that? but, but this has much to do with, with what do you as president joe biden set about trying to not passing the us to become a global leader on, on his watch that this decision by the dutch government

a is ultimately being decided somehow, behind the scenes by the us. ok. thank you very much for that question and i think it's a great one. i think the, the only difference i would point out is that a lot of the efforts to control not only e u, v, but the less advanced d, you, me, d, u, v. machines from the netherlands to china actually began in the previous administration . and that's important context because it really does show an absolution of us policy to regard china increasingly as a threat unless as a customer that is largely in effect of the pursuit of civil military fusion and china, which increasingly blurs the line between one is primarily a civilian good, and one that is primarily a military good. i understand that the united states provided sufficient intelligence to the doctor government to convince them that it really was a matter of national security to control the u. v. machines. and furthermore,

countries like japan, the mother lands and even south korea, had really had it with ip asked when it comes to high attack. and so i think it was the perfect confluence of factors leading to these additional controls. okay, well, we'll get into what these machines actually are and what they do and just above it but, but 1st step and what do you make all of this? that must be some legitimate security concerns. so when you call and have a potential advisory in possession of technology to pay ultimately be used against you can do well, that's a bad idea. certainly, i mean, i'm also struck by this notion that somehow you of 27 european countries of no agency at all, which is absurd. but the bottom inspection is struggling to get you to go along with that on china. it's not always going very well for reasons that we've all discussed and europeans interests are not the same as american interests. but it is

also true that in general, your can government see the rich chinese technological espionage. and it's, do we use production as dangerous, less dangerous to them? and so yes, the us may be pushing, but they're pushing an increasingly open door for it. well, other countries now follow the docs lead or feel pressure to do so. of god fully expect that the european transatlantic allies of the united states to ultimately fold into line. it is true that each nation will come on through these decisions in par on they are on. but they don't do that outside of context. and the fact of the matter is that there is

a consistent pattern of behavior from european governments. and that is initially a bit of pushback on various things, a little bit of weighing around on various factors, but ultimately they fall into line. and i think that from the us as a point of view, there is a strong expectation that push comes to shove, the trans atlantic outlines will ultimately do what they asked to do. and we're going to start to see that happening all the time. i think that that is going to be a surprise to anybody if the pulled of go to europe and countries into a, into, into a bit of a pickle. because frankly, we've got on the one hand full of studies pushing them to do something that creates tensions. with the country that the needs of all the european nations of all sort of, kimberly dependent on for a whole bunch of other economic transactions and benefits as well. i guess these are really contradictions about times if you will. and europe,

in this particular case happens to be a, you know, right in the middle of middle, emily, where does this leave a trade policy as well? it's interesting if you look at the u comic security strategy document that came out, i believe last tuesday, it actually outlines, but in september they will significantly update their dual use list of goods. and this will free seat, of course, a potential outbound investment screening mechanism. in december, so whether or not another one's reach to this of the final outcome completely independently. it is indeed forcing the europeans to update their toy use list. another factor here, of course, is that most countries export controls are tied to a more camp lateral regime, which has been bosner arrangement. russia is a member of that consensus based organization. and its membership has precluded the

update of any high tech goods. the last couple of cycles, and so either way, countries and unions like europe are having to really contend with how they go about updating regulations. and although this could have come about differently from a diplomatic standpoint, i think we will see greater policy convergence overtime. stephen is the most you countries the, the merits and legislations like this, they understand the reasoning behind it or is that a feeling to a certain extent that that being pushed around here by, by the us. i think it's a bit of both, frankly. i mean, yes, the us is pushing no question. that's also true. there's bunch companies to clearly sophisticated and it's products of particularly desirous objects. sullivan keeps talking. the us national security adviser keeps talking about the risk and from china. one can define what that means. i think for some europeans, when he says,

we want a small garden with high walls, they think the garden will be the size of the texas. but they do understand that helping. she's in thing, do more quickly what she's in thing says he's going to do. which has to make china capable of invading taiwan by 2027 and becoming the world superpower by 2050. may not be in the herb's best interest. now. it's also true. europe has great trade with china. there's lots of things to do with china. there's climate. the interest of europe are not exactly the same as the united states. suddenly in europe, doesn't see china as a pure rival. the way the us does in europe doesn't have the same exact pacific in the pacific interest that we're a, does have some in the pacific interest. so i think the new china is getting darker

and partly she's in things faults because he's been much to explicit him in some people's minds by china ambitions. i'm the intent as not to curtail china from growing the intent is to prevent the chinese military from getting a technological advantage through trade and i still haven't done that. that's impossible, isn't it in, in, in the long term. i mean, it would, china is, is good to somehow circumvent this band if, if it can't produce the technology itself, ultimately, if it con, purchase rather the technology elsewhere, ultimately it's gonna, it's gonna learn to produce the technology itself. it can, it will perhaps, but it's proven very difficult. and if you look at the chips work in taiwan, if you look at this dutch company, these are not easily wrapped

a couple of things though. china is trying and trying to, we'll try and trying to at some point will succeed china's, you know, look, i mean, it's took a long time for them to build a jet airplane that works well to be a big passenger jets. they're fighters slow, pretty much like stolen and copies of american fighters. so china is busy, china's smart people are smart and they'll get there. but the whole point is that nonsense doesn't want to make it easier on them to get their work with without getting to technical here. what sort of equipment we actually talking about here, middle talking about sending conductors themselves with talking about machines that helped to produce semi conduct. this is that right? no, that's right. and um, and the, and the fact the matter is that in terms of must be latree application. some of the chips that are used readily available and manufacturer will anyway. so that whole

issue is largely a fee in terms of military applications. today. i'll go back to what i originally said in that is that the us post job that is shaping this entire i'm, but public policy approach and reorientation around technology and try and policy is driven by a broad sweeping. i'm be sure to ensure that china does not become the leading nation in the world under j bottoms. watch the bottom light, the very, very clear. it's got nothing to do is taiwan 2027 that you go. i think that that he is doing the lately, and he's also cooking woods in the mouths of the people who haven't actually set that mean fact, general milligan, i think today or yesterday might be almost a violation that he himself couldn't read united president shriek and pins mine in terms of the any pets split dates for anything, a whole side. and by the access,

the cool proposition he bought is on the right. cool. but he's that america does have a view that china is catching up to it and he's a challenge. it to us in a very systematic sense, the or pans also say john or it's a systematic and get a lot of challenge. and that is becoming more and more pronounced in terms of some of the, the language you used by different european leaders in this particular space as well. so i think we all got to say policy converge students in a transatlantic sense the. ready of the differences in interest, i think, uh, genuinely they, but nonetheless, i think that the europeans will ultimately fall into line to some extent that they cost, but they will full, full into line and um, and behave like, like the good, you know, transatlantic, that lives that the us expects them to be

a part good work of it. to what extent are they on a hide into nothing bite and that is european allies. i mean, joe, by themselves, could be out of a job within 18 months, and it is only a matter of time, surely before china achieves its ambitions. it's an unstoppable tied. isn't it? predicting the future isn't very difficult thing. and uh, like, uh, my, my, my colleagues here on the show today, i think there is an expectation that even old probability, that the time that you didn't did was in this arena will ultimately pay for. the real question is, how long will that take and well, what the impact of that delay is likely to be on the old range of calculations electronic has proven its ability. so both emulate technologies as well as the unified significantly it's so what you know, when it was denied an opportunity to participate in the spice stations program and

ultimately impact on signing initiatives to some success. so i think that it is a reasonable working assumption that at some point in the not too distant future, you know, whether it's the straight use 5 years or 7 or 8 or 9 use that these technologies will ultimately be within the capacity of the chinese scientific and engineering will emily try this, obviously, and the other one is called the new law abuse of export control measures that seriously disrupt free trade and international trade rules with a rise on pay. well, i think what's interesting about the current trilateral arrangement or series of unilateral controls, if you want to think of it a little differently, is that they are not a complete embargo. these are designed to exercise existing cho coins over very high tech parts of this on the conductor supply chain. there are many

countries who participate throughout the supply chain, malaysia, south korea, only a couple of countries really have these viable choke points over the most advanced chips. those are the united states, the other ones and japan. what's interesting about the adults controls is that they're similar to the japanese list of 23 items about their country agnostic. and so these 2 governments have gone out of their way to say this isn't about china. this is about taking extra preventive measures to make sure that our most advanced technology is not getting into the wrong hands. and so while i can see that china would be frustrated with the expansion of controls than other ones. how to walk a very fine line between the united states and china, and this is a dynamic that is unlikely to change. under a change of administration, we will consent to continue to see closed trading partners having to make tough decisions. and again,

i think the other ones here has done what it can and also taken extra steps to make sure that the european commission is able to lift these regulations and make fun of applicable to the 20 southern member states. stephen would, would, would you agree with this? what does this mean for, for global trade rules? are they going to have to be rewritten now because the u. s. takes it in view of certain products, getting into chinese hands. well, the w 2 has been in trouble for quite a long time. partly it's washington news problem and partly it's washington's problems with way to china. but i think the w t o is an institution that is barely, a lot of people are not paying as much attention to it as perhaps they should, which is a big problem for the european union, which lives by, you know, quite, quite nicely rightly international rules and, and norms,

but if you look at a lot of the bottom administrations national industrial policy which is somewhat new, it doesn't pay much attention to w t o rules that of course, that always argues that china is manipulating those, those rules, etc, etc. and there's always blame being thrown around, but to your point, i do think the w t o is an institution of declining importance. i'm not saying that's bad or good. it's just the fact i'll come back to, to work in just a moment for us at the end of emily, this seems like your, your ballpark. would you agree with that? i think there are a couple of different factors that play. i would agree, but there are provisions i've been placed on reduction act, for example, that directly contravene the core objectives of the w t o. they are quite clearly

illegal. however, to defend the united states in this particular instance of export controls that wto has never sufficiently dealt with issues of national security and investment security. anything the funds related has really been housed elsewhere. and the united states did play a vital role in standing up this 40 to member coalition and the boston our region. and that is the multi lateral studying to promulgate controls. like i said earlier, because our rushes membership in that institution updating it has been essentially impossible. and it is now defunct, that binds a lot of questions about lackluster performance of the re, to an ongoing desire to multilateral lives. where possible, this increased and fusion of national security and the economic policy making, we probably do need to look at the institutions we have and revitalize them. and that's why i am particularly optimistic about the potential expansion of the g 7. i

think from that baseline we can build something that's a little bit more um, a little bit better suited to today's environment. steven, i, i see you knowing that, oh yeah, no, i think, but at least like makes it more of a sense to me. i mean, the world is shifting, you're getting more rivalry or getting regional rivalry is the, this notion that we're all going to have free trade and then somehow separated from serious national security issues, let alone. what about in calls of foreign policy for the middle class makes it a much more competitive world. and frankly, a more protection as world. i mean, the european union likes to talk about resilience. other people would call that protectionism back and forth. i mean, one word is roughly the same as as the other one. the big question is how big a garden are you gonna wall off?

and i think that's the big question. whether it's less underlying talks about the risking. she's talking about not being overly reliant on anyone in the country, but sometimes the news china for g materials. but even though if you take that too far, you end up with as a very real kind of, uh, tech support protectionism export controls, important controls. and that's where that's, that's where we're headed, i'm afraid. so i think what emily's saying makes tremendous sense to your work. feel free to, to come in on that point if you want. but this dutch legislation didn't mention any particular company in particular, but of course benevolence. this is home to an ssl, one of the, the most important semi conduct a companies in the world. i mean, what does this mean for that bottom line? how big a customer for them. it is china as well when people filter them because

they would have been banking on having the styles you know, into the, into the forward projections in terms of a p. and i also no doubt, but as cfo is now scratching around to try and figure out how they're going to square the circle and make sure that the sufficient aren't the resources and those sorts of things to, to, to take the, take the company fold up. but i'll touch on base this broad question of try that was done last week rather than that a. so i think that there is a shift obviously in the configuration of the the console cloud will tried. the question of the national security has become more prominent, but we don't know what that means in terms of how the w to your ultimate lee would trade at the, at the end. and i think that the, the ultimately going to be a need to get a granted clarity around what the issues actually main from i think it is

a challenge ultimately for your but because the us has, it's for quite some time being re shaping a much more protectionist approach to one way 80 stands in the world, and it's mainly for bryce and your site is actually on the industrial part of the landscape of the european union and the aggressive policies that the bottom distraction in particular has implemented in terms of lowering technology companies a lot of the companies to the, to north america, having an impact on, on europe, is starting to play on the minds of corporate within europe in terms of whether or not they remain domiciled in a high cost environment will take advantage of subsidies in north america these aren't going to be the challenges that will, that will create fractures between european they cannot make it easy for us and

the broad uh, so the security interest of the transatlantic alliance and everything. but you, would you agree with that? i mean, at work said that the a, a m s l is sort of its own helpful, but for the bottom line, good. all the industries and technologies now find themselves subject to similar legislation elsewhere. yeah, i think that's a great question. i mean, these control will head not only as small, but also have some i and so you're looking at the 2 major dodge players in the sector. another great question is when the peter wanting the ceo of animal has brought up several times, which is to suggest this really won't affect the bottom line too much because we already have a significant amount of backorders. and alternative marketplace is, however, a bottom turn back to the question, if you can't solve to china to soon can you? so who is willing to pay and able to pay for these machines like can run up to

$300000000.00 per machine. so that will be very contingent upon the united states to help if i was to figure out where is a safe trust, your trading partner, every, i'm sorry, sorry to cut you off with with almost out of time statement. very, very quick thought from you just just to end. well, simply to say the tensions between europe and the united states on trade are increasing. they will increase, but your opinions to worry about this also understand that if they're worried about donald trump becoming president again, they need to not undermine joe biden when he tries to create jobs for white, middle class american voters, manufacture date to, to your, or steven, a longer emily events and the and work power, so being with us. so today, much appreciated or as always thank you for watching. you can see the program again

at any time by going to the websites out 0 dot com for further discussion. join us a facebook page on facebook dot com forward slash h a insight story out. of course you can join the conversation on twitter handle at a j inside story from me, adrian said again for the team here. and uh, thanks for being with us. will see you again for the the a disciplinary quote in poland. the accused judges who refused to the states line.

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