Amid the fallout from former Nvidia CEO Jensen Huang’s resignation, some analysts say that if the United States uses the episode to tighten semiconductor export controls on China, Beijing is likely to hit back with a rare earths card.
On the 13th local time, the South China Morning Post (SCMP) in Hong Kong quoted Victor Gao, vice chair of the Center for China and Globalization (CCG), as saying it would be a “complete miscalculation” for the United States to use the Nvidia affair to pressure China, adding that “China will tighten controls on rare-earth exports.”
Wang Yingliang, editor-in-chief of the economic analysis platform Sharp Voice, also said the United States has gained new justification to toughen semiconductor export curbs on China by turning former CEO Huang’s private-life issue into a compliance issue, but he added that China has countermoves of its own.
He assessed that China could sanction U.S. companies and try to win concessions on semiconductor export controls by using cooperation on trade talks, rare earths, narcotics, and telecom fraud as leverage.
At the same time, he said China could cushion the blow from tougher sanctions because its semiconductor inventories are substantial and its domestic technological capabilities are rising.
He added that uncertainties remain, including probes into Alice Huang, identified as the former CEO’s alleged affair partner along with suspicions of Chinese spying, but predicted U.S. President Donald Trump would keep current semiconductor export controls in place unless national security concerns spread further.
Xu Tianchen of the Economist Intelligence Unit (EIU) said that the previously agreed “constructive strategic stability” was a matter between China and President Trump, but that Trump has been weakened after the U.S. midterms in which the opposition Democrats won by a landslide, seeing U.S.-China ties as more vulnerable.
Since the start of the Trump administration and the ensuing trade war, China’s rare-earth export controls and U.S. semiconductor export restrictions on China have been viewed as each side’s key card.
President Trump and Chinese President Xi Jinping are set to hold their third summit of the year during the Asia-Pacific Economic Cooperation (APEC) leaders’ meeting in Shenzhen, Guangdong, on the 18th–19th.
