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Showing posts with label Competition. Show all posts
Showing posts with label Competition. Show all posts

Sunday, 4 January 2026

China racing ahead in Britain

 

Keith’s BYD car dealership in Leeds, England. In the last year, Chinese-made vehicles have doubled their share of new car registrations in Britain. — Owen Richards/The New York Times

ON a recent Monday in Leeds, Dougal Keith drove a Chinese-made BYD Seal Excellence out of his dealership and hit the accelerator.

The car can reach 100kph in 3.8 seconds – a key selling point – and comes with a £48,000 price tag, roughly 20% cheaper than a top-range Tesla Model 3.

Keith, a car salesman for more than 40 years, said customers were sceptical of buying Chinese vehicles when he opened a showroom for BYD in 2023.

Now, he runs six dealerships devoted to the brand.

“Some people think because it’s Chinese it’s made cheaply,” he said. “But then I ask, ‘Where do you think your iphone is assembled?’”

Chinese cars are gaining ground in Britain for a mix of reasons.

There are no steep tariffs on Chinese EVS – unlike in the EU or the US – allowing lower prices. British buyers are also less brand-loyal, with no major domestic mass-market automaker to defend.

Roughly a dozen Chinese brands, including BYD, Chery and Geely, made up 13% of new car registrations in Britain in November, double their share a year ago, according to the Society of Motor Manufacturers and Traders.

“The pace is like nothing the market has ever seen,” said Ian Plummer, chief commercial officer of Autotrader.

BYD and Chery, selling Jaecoo and Omoda models, are gaining market share five or six times faster than Tesla a decade ago or South Korea’s Kia in the 1990s.

Britain’s domestic auto industry has been shrinking, producing about 600,000 cars in 2025, roughly half of the output at the end of the last decade.

Major producers include Nissan, Jaguar Land Rover and Mini.

Meanwhile, China is now the world’s largest car exporter and leads in EV production, exporting to markets from Mexico to South Africa.

Chinese automakers have mastered shifting regulations and consumer demand, particularly for hybrids.

Beijing encourages exports to manage domestic overcapacity, sometimes leading to heavy losses and triggering pushback in Western countries.

The US has imposed 100% tariffs on Chinese EVS, the EU up to 45%, while Britain charges 10% on all imported cars.

About two million new cars are sold in Britain each year.

Since 2019, the number of brands registering sales has nearly doubled to over 70.

No single brand commands loyalty like Volkswagen in Germany or Renault in France, giving newcomers room to grow.

Chinese brands first gained a foothold with SAIC Motor’s acquisition of MG.

Production gradually moved to China, and the UK MG factory closed in 2016.

MG now accounts for over 4% of new registrations – the largest share for a Chinese-owned brand – while BYD holds just over 2%, similar to Tesla.

Keith sold his first car in 1980 at 16 and later expanded his family business.

By the early 2020s, he noticed BYD and,

“Some people think because it’s Chinese it’s made cheaply. But then I ask, ‘Where do you think your iphone is assembled?’”
Dougal Keith

with other independent dealers, secured one of the first UK franchises.

Initially, sales were slow, with only an all-electric model available.

As more models arrived, particularly plug-in hybrids, sales surged.

Dealers highlighted tech features: rotatable touch screens, wireless chargers, voice controls, even karaoke.

“Customers are beginning to understand it’s not a budget brand,” said Fozia Siddique, who has worked with BYD since the Leeds showroom opened.

She recently sold a BYD plug-in hybrid SUV to Steve Vine, 55, who drives more than 480km from Leeds to Cornwall and wanted a long-range EV.

Roger Lyons, 60, in Derbyshire, chose a £48,000 BYD Seal Excellence after testing Audi, Hyundai and Porsche models.

“It’s almost as nice to drive as a Porsche, and it’s got more toys than any of the others,” he said, adding that switching to electric would help cut fuel costs.

Encouraged by the success of BYD, Keith opened two more dealerships selling Changan vehicles.

His group, which runs 28 dealerships selling global brands, expects £500mil in sales for 2025, over 50% higher than 2024.

In September, the Leeds BYD showroom outsold all his other local locations.

“It’s pretty good going for a brand that two years ago nobody had heard of,” he said. — ©2026 The New York Times Company

By ESHE NELSON This article originally appeared in The New York Times
3 Jan 2026

Monday, 24 March 2025

Getting it right

 

US-china trade needs to improve as much as their bilateral relationship deserves much better, but not at the present rate.

Auto ambition: With limited competition abroad but hypercompetition at home, China’s EV industry has powered ahead. — AFP

T

HE constant stream of major global events can be disorienting, particularly when their consequences spin off to produce secondary effects.

Worse, self-interested politics enters as a disabling narrative to make factual understanding more difficult. How to make sense of all this?

One way is to identify the root causes and critically analyse how they develop and proceed. Factual accuracy in descriptions and definitions always helps, while imprecision makes everything more difficult.

Much relates to a rising China and the state of US-China relations. With the world’s biggest economies, theirs is the most critical bilateral relationship for the world and also the most politically fraught. 

In 2004 China displaced the US as Japan’s main trade partner. The following year it displaced the US as the world’s biggest consumer market.

In 2006 the EU became China’s biggest trade partner while China became the EU’s second-biggest. In 2009 China displaced the US as Africa’s main trade partner, and in 2010 it beat Japan as the world’s second-largest economy.

China’s external trade covered a wide range of goods and services as its productive forces gained critical mass. In the process, industrial clout came not simply from resources and scale but also strong production ecosystems and supply chains, including a skilled workforce.

China quickly developed as the “world’s factory” with the Global North’s industries choosing to relocate production there. They flocked to establish factories in China offering the best returns on investment.

But while foreign companies retained older technology like internal combustion engines (ICE), China prioritised electric vehicles (EVs) to cut air pollution and dependence on imported oil. There was no domestic oil lobby to derail EV development, only government encouragement instead.

With limited competition abroad but hypercompetition at home, China’s EV industry powered ahead. That meant a quick and considerable lead in technology and marketing overseas.

In 2009 China surpassed the US as the world’s largest automobile market. This spanned both ICE vehicles and EVs, with a muted but growing market for the latter.

In 2020 China displaced the US as the EU’s top trading partner. That same year it acquired the world’s largest foreign exchange reserves, developed the finest fintech, and had the most companies listed in the Fortune Global 500.

China’s auto production was booming, exploding into a global market hungry for sophisticated yet affordable vehicles. China fulfilled that need better than any other country.

In 2021 Chinese auto exports surpassed South Korea’s, and the following year it displaced Germany as the world’s second-biggest exporter. Within months China beat Japan as the world’s top auto exporter.

Much the same is happening with other sectors, if at different growth rates. China continues rising through the rapid development of multiple industries, particularly when several foreign markets remain unexplored or under-served.

Western automobile manufacturers in China felt a need to work more with Chinese companies, particularly on EVs and hybrids. They prefer joint ventures to discriminatory tariffs or sanctions on Chinese vehicles from their governments.

Yet last April US Treasury Secretary Janet Yellen visited China to complain about “excess capacity” and “overproduction”. It was more a political point than an economic argument.

Excess capacity is surplus productive capability over and above what is needed or appropriate. Overproduction is the additional goods produced and left idle because of insufficient demand.

As the world’s factory with regional markets still untapped, China has no excess capacity or overproduction. High Western tariffs to stifle demand may create a semblance of either, but artificially inducing a situation to accuse Chinese industry of it is dishonest.

Sometimes dumping happens with a specific commodity temporarily, typically for an intermediate or upstream item. But that is different.

After Joe Biden’s administration acted against Chinese EVs, batteries and solar panels, they shifted to markets in Russia, Latin America, Central Asia, Africa and South-East Asia. China is a global producer, and since there is no global overcapacity or overproduction, it is not engaging in either.

Chinese industry’s ultra-competitiveness seriously challenges US industry, notably in the latter’s obsolete business models. Regaining US global competitiveness requires extensive retooling, not distorted narratives.

From 2011, China has consistently been the world’s top patent applicant country. Each year it graduates more STEM students than the US population has in total, having produced the most STEM PhDs every year since 2007.

In 2021 China beat the US in its national share of published high-impact AI papers. In the same year it also displaced the US with the highest national net worth.

Such data from established Western sources also noted in 2023 that China had seven of the world’s top 10 universities conducting leading scientific research. Last year China had six of the world’s top 10 STEM institutions.

The US is now denying students from China study visas. America would be greater in training more American students without restraining others who pay to be there.

By Bunn Nagar,  Director and Senior Fellow of the BRI Caucus (Asia-Pacific), and Honorary Fellow at the Perak Academy. The views expressed here are solely the writer’s own.

Thursday, 9 February 2023

Microsoft to enhance search engine, browser

 Microsoft is rolling out an intelligent chatbot to live alongside Bing’s search results, putting AI that can summarise web pages, synthesise disparate sources, even compose emails and translate them into more consumers’ hands. — Reuters

REDMOND: Microsoft Corp is revamping its Bing search engine and Edge Web browser with artificial intelligence (AI), the company says, signalling its ambition to retake the lead in consumer technology markets where it has fallen behind.

The maker of the Windows operating system is staking its future on AI through billions of dollars of investment as it directly challenges Alphabet Inc’s Google, which for years has outpaced Microsoft in search and browser technology.

Now, Microsoft is rolling out an intelligent chatbot to live alongside Bing’s search results, putting AI that can summarise web pages, synthesise disparate sources, even compose emails and translate them into more consumers’ hands.

Microsoft expects every percentage point of share it gains will bring in another US$2bil (RM8.6bil) in search advertising revenue.

Working with the startup OpenAI, Microsoft is aiming to leapfrog its Silicon Valley rival and potentially claim vast returns from tools that generally speed up content creation by automating tasks, if not jobs themselves.

That would affect products for businesses, such as the cloud computing and collaboration tools Microsoft sells, as well as the consumer Internet.

“This technology is going to reshape pretty much every software category,” Microsoft chief executive Satya Nadella told reporters in a briefing at the company’s headquarters in Redmond, Washington.

The company’s share of search so far is about an estimated 10th of the market. Still, many investors see new technology as a win for all players. Microsoft’s stock closed 4.2% higher on Tuesday, while Alphabet gained 4.6%.

The power of so-called “generative AI” that can create virtually any text or image dawned on the public last year with the release of ChatGPT, the chatbot sensation from OpenAI.

Its human-like responses to any prompt have given people new ways to think about the possibilities of marketing, writing term papers, disseminating news or querying information online.

Microsoft’s new Bing search engine is live in limited preview on desktop computers and will be available for mobile devices in the coming weeks.

The company hopes user feedback will improve its AI, which Microsoft officials said may still produce factually inaccurate information known as hallucinations. Meanwhile, it has worked to prevent the misuse of its technology.

Underpinning the new Bing is what Microsoft is calling the Prometheus model - OpenAI’s most powerful technology, informed as needed by real-time web data from Bing.

That means Bing’s chatbot can brief consumers on current events, a step beyond ChatGPT’s answers that are currently limited to data as of 2021.

Jordi Ribas, Microsoft’s corporate vice president for search and AI, told Reuters the tech advances his team witnessed last summer emboldened the company to move ahead with an AI-infused Bing.

Microsoft’s chief financial officer also said OpenAI’s “new, next-generation” technology is powering its search engine, though officials declined to specify if this entailed the startup’s highly anticipated upgrade known as GPT-4.

Microsoft is aiming to market OpenAI’s technology, including ChatGPT, to its cloud customers and add the same power to its entire suite of products, not just search.

In the near term, Gartner analyst Jason Wong said Microsoft’s “partnership with OpenAI is more relevant for its business customers.

It could offer “disruptive opportunities” in consumer businesses as well.

“Except for gaming, Microsoft has not been a leader in key consumer technologies, such as search, mobile and social media,” he added.

Google has nonetheless taken note of Microsoft’s challenge.

On Monday, it unveiled a chatbot of its own called Bard, and it is planning to release its own AI in search that can synthesise material when no simple answer exists online.

Microsoft’s decision to update its Edge browser will likewise intensify competition – with Google’s Chrome competitor.

However, the Redmond-based company expects to roll out the updated Bing to other browsers eventually. — Reuters 

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Thursday, 15 December 2022

US succeeds in hypersonic missile test launch, technology China has long mastered

 

Xinhua file photo of a B-52 strategic bomber

 

After a series of failures, the US Air Force on Monday announced that it has finally succeeded in the test launch of its air-launched hypersonic missile, a technology China has long mastered and even put on public display at a recent air show.  

The US’ scheme is to use the hypersonic missile and the recently revealed B-21 stealth bomber to penetrate China’s air defense, but the Chinese People’s Liberation Army (PLA) has what it takes to defend the country, experts said on Tuesday.

A full prototype of the Air-launched Rapid Response Weapon, also known as the AGM-183A missile, was launched from a B-52 bomber off the coast of California on Friday, and all of the objectives of the test were met, CNN reported on Monday, citing a statement from the US Air Force.

The AGM-183A is a boost-glide missile that uses a booster rocket to accelerate a projectile to hypersonic speeds, before a glide vehicle separates from the booster and uses inertia to travel to its target, CNN said.

The successful test launch of the missile came after a series of failures in testing last year, forcing the Air Force to delay the project at a time when China and Russia have shown advances in their own programs, CNN reported.

During the Airshow China 2022 held in Zhuhai, South China’s Guangdong Province in November, the PLA Air Force put on display an H-6K bomber which carried a type of missile  widely believed to be hypersonic.

China also displayed the DF-17 hypersonic boost-glide missile at the National Day military parade on October 1, 2019 in Beijing.

Russia’s Kinzhal hypersonic air-launched ballistic missile has also been reportedly deployed in combat in the Ukraine crisis.

With China and Russia taking the lead in hypersonic weapons development, the US is hurrying to build ones of its own, with the rush felt in several previous failures, a Chinese military expert who requested anonymity told the Global Times on Tuesday.

Compared with its Chinese and Russian counterparts, as well as air-breathing hypersonic missiles, the AGM-183A should not be considered very advanced, the expert said.

On December 2, the US Air Force’s next-generation stealth bomber, the B-21, made its public debut.. The US wants to use the low-end B-52 bomber which cannot penetrate air defense on its own to carry the strongly penetrative, standoff AGM-183A hypersonic missile, and use the high-end B-21 stealth bomber to drop inexpensive munitions within the opponent’s defense lines, Zhang Xuefeng, another Chinese military expert, told the Global Times.

Chinese military aviation expert Fu Qianshao told the Global Times that the AGM-183A can be intercepted before it is launched from the B-52, which is a large and slow target that can never be stealth.

Another option, which can also counter the B-21, is to attack bases and airfields where the bombers are deployed, Fu said. 

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China launched a solid-fuel rocket from mobile sea platform 

 https://spacenews.com/china-launches-14-satellites-with-new-solid-rocket-from-mobile-sea-platform/

China recently carried out the maiden flight for a type of new high-altitude, high-speed demonstrator drone, which can ...

HELSINKI — China launched its new Jielong-3 rocket from a mobile sea platform in the Yellow Sea Friday, successfully sending 14 satellites into orbit. The Jielong-3 (“Smart Dragon-3”) lifted off at 1:35 a.m. Eastern (0635 UTC) Dec. 9, from the Tai Rui modified barge off in the Yellow Sea. 

 
 

Thursday, 20 October 2022

China’s quality development is profoundly smooth, steady

 


China's economy is stable and on the rise.

During the ongoing 20th National Congress of the Communist Party of China (CPC), an official in charge of the National Development and Reform Commission said at a press conference that judging from the current situation, China's economy rebounded significantly in the third quarter, and from a global perspective, China's economic performance is still remarkable. Although affected by changes in the domestic and external environment, there are still some outstanding contradictions and problems in the current economic operation. However, China has a population of more than 1.4 billion and coupled with basic conditions such as a complete industrial system and a comprehensive industrial chain, "China's economic stabilization and improvement will be further consolidated."

We have noticed that the assessments that some well-established international agencies made recently on China's economy coincide with China's own remarks. A well-known consulting agency said that most preliminary economic data indicated that China's economy recovered in the third quarter. Experts from the Economist Intelligence Unit also believe that compared with the economic difficulties of various countries in the world, "China has some unique advantages at the moment," which enables China's economy to maintain positive growth even when faced with great internal and external pressure.

Of course, when people pay attention to and discuss China, there are also negative and pessimistic arguments, and some even regard China's development and security, government and market, openness and independence as contradictory to each other. Part of it comes from taking wishful thinking as fact, because it has long been "standard configurations" for some US and Western public opinion to downplay China; at the same time, part of it results from looking at "speed" with the outdated thinking and vision, without understanding the deep logic of China's high-quality development.

If we observe the Chinese economy from the perspective of quality development, we will look through the complicated and indistinguishable superficial information to see the ongoing evolution and the improvement of the Chinese economy. In recent years, although the growth rate of China's economy has declined a bit compared with some periods in the past, its economic structure has been continuously optimized and its development momentum has been enhancing. In particular, the development speed of high-tech industries is equal to doubling the average development speed of the entire industry. Some major technological fields have made their ways to the global frontier, transformed by innovation-driven factors instead of the factors such as land, capital and labor in the past. At the same time, the energy consumption per unit of GDP has continued to decline. The sky is bluer, the mountains are greener, and the water is clearer. Although facing some temporary challenges and difficulties, China has enhanced its ability to overcome difficulties in its economy. 

Illustration: Chen Xia/GT

Illustration: Chen Xia/GT 

The report to the 20th CPC National Congress stressed that "To build a modern socialist country in all respects, we must, first and foremost, pursue high-quality development." If the Chinese people are to live a better life and the Chinese nation is to realize its great rejuvenation, maintaining economic growth is of course very necessary. At the same time, the Chinese people have a broader and more comprehensive understanding of growth. And high-quality development is a new concept in which "innovation is the primary driver, coordination is an endogenous trait, eco-friendly growth prevails, openness to the world is the only way, and shared growth is the ultimate goal." This is also China's proactive pursuit of following the laws of economic development, adapting to changes in major social contradictions, and maintaining sustainable and sound economic development.

Compared with the past, China now puts more emphasis on maintaining national security, because the global security situation today has become more complicated, especially when the US is fanning flames and creating geopolitical crises everywhere and treating China as its No.1 strategic competitor. Against the backdrop of a sudden increase in external risks and a more insecure world, where can development come from without the overall favorable environment of national security? Some US and Western public opinions have deliberately put development on the opposite side of security, simply because in their hearts, they do not want China to be secure, nor do they want China to grow and develop.

The giant ship of China has always pointed to a determined direction, never going off its course nor turning around. In the new era, the CPC, in accordance with the changes in reality at home and abroad, has taken precautions and foresight to extend and develop the experience summed up in the past decades, and then has established a new development concept and strategic plan, which is coherent and consistent with the past development direction.

One thing that is absolutely certain is that China cannot copy the Western model for its development, and anyone expecting China to follow that path is bound to feel disappointed and will complain that "China has changed." But in fact it's not China that has changed. Instead, it is that they have made a wrong judgment from the very beginning; it can even be said that those who have been bad-mouthing China are disappointed, which just shows that China has done the right thing.

Although China is already the second largest economy in the world, its per capita income is still far behind that of developed countries, which means greater economic growth space.

Implementing the spirit of the report to the 20th CPC National Congress, insisting that development is the "first priority" and high-quality development as the "primary task," we have ample reasons to maintain confidence in the Chinese economy. 

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Saturday, 30 July 2022

US pushes chip bill to encircle China, but ‘unable to lure firms to decouple with mainland’

 

US 'Chips Alliance' scheme will exacerbate global chip crunch. Illustration: Chen Xia/GT

 

A chip manufacture machine Photo: VCG

A chip manufacture machine Photo: VCG

 

The US Senate on Wednesday passed a chip bill that is intended to counter China's high-tech rise under the guise of shoring up US competitiveness and protecting national security, a "dream" that is very difficult to achieve considering problems like mounting debts and industrial hollowing-out in the world's largest economy, experts said.

r countries and regions that have been kidnapped by the US bill to secede their chip supply chains from China, some might make symbolic gestures to follow the US orders but postpone real actions, like setting factories in the US, because what the US is pushing runs counter to their tangible benefits, observers noted.

The bill, aimed at boosting US semiconductor production, passed the US Senate 64-33 on Wednesday and will move to the House and US President Joe Biden for approval, US media reported.

The package, known as "CHIPS-plus," includes about $52 billion of funding for US companies making computer chips, a provision that offers a tax credit for investment in chip production, as well as funding to spur innovation and development of other US technologies, the report noted.

Although US officials have used many expressions to justify the bill, like economic security, national security or "America's future," its real intention of containing China's development has nowhere to hide judging from the bill's requirement for companies to pick only one of two choices - business ties with China, or subsidies from the US government.

The legislation would prohibit companies from expanding their semiconductor manufacturing in China for 10 years after they take a grant to build a US plant, Bloomberg reported on July 18. Companies could continue to invest in "legacy" chip manufacturing in China, but the definition of that term is unresolved.

"The US is using the bill to force companies in countries and regions of key status on the global chip supply and industrial chains to play by US rules, as well as encircling and suppressing chip industries in emerging markets," Wang Peng, a research fellow at the Beijing Academy of Social Sciences, told the Global Times on Wednesday.

Gao Lingyun, an expert at the Chinese Academy of Social Sciences (CASS) in Beijing, told the Global Times on Wednesday that the bill is aimed at containing China's development and putting the US on a more competitive footing with China in the technological edge.

Stuck in difficult position

As US officials mount efforts to push the bill toward passage, which experts interpreted as shifting from a "stick" approach by forcing companies to leave China to a "carrot" tactic with subsidies as bait. Chip companies, either in the US or in other countries and regions, are finding themselves in the difficult position of having to take sides.

A CNBC report noted that the CHIPS act has elicited divided responses from the US chip industry, as some players are concerned that the bill could provide disproportionate support to manufacturers like Intel while doing little to support other chip firms that do not produce chips by themselves.

But even companies like Intel are not one hundred percent satisfied with the bill. According to a report from Politico, Intel and other chipmakers are lobbying to curtail limitations on their operations in China.

Experts stressed that large US chip companies always know that globalized distribution is the best option for them, as the mode has supported their business growth over many years.

"If companies build plants in the US, where do they get cheap labor and construction materials from? How do they cover their factory operating expenses? Why build a factory where the end market is far away?" questioned Ma Jihua, a veteran technology analyst.

Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, said on Wednesday that for some large US companies, getting the subsidies and giving up the Chinese market will mean more losses than gains. For instance, Intel is unlikely to completely give up the Chinese market, which accounts for 20 to 30 percent of its entire annual revenue.

For US allies like Japan and South Korea, whose semiconductor industrial chains are deeply integrated with the Chinese mainland market, the situation is even more difficult.

"If they listen to the US, their companies might get tens of billions of dollars from the US, but they will lose hundreds of billions of dollars or even more due to decoupling with the mainland markets," Ma said.

They will not only lose Chinese chip customers, but could also see spillover effects on other products as well, similar to how South Korean companies suffered in Chinese mainland market after the Terminal High Altitude Area Defense (THAAD) crisis, the expert said.

Ma anticipates that Japan is prone to saying yes to Biden but would not cut its cooperation with China in reality, while South Korea is likely to face severe opposition from its large chipmakers.

Xiang said that enterprises from Japan and South Korea may make some symbolic adjustments under this bill, like building factories in the US, but they may repeatedly postpone such investments because of the high cost of the technology.

The US proposed the idea of the "Chip 4" semiconductor alliance and sent invitations to Japan, South Korea and China's Taiwan island. Though South Korea may ultimately join the bloc, Seoul's long hesitation to give a clear answer is evident of its dilemma.

Plan invalid

Experts said that the effect of the US chip bill may not meet the US' anticipation in reshaping the world's semiconductor supply chains, in which China now play an important role in producing parts.

For example, Gao Lingyun from CASS said that the overall cost of making chips in the US is not very competitive on the global market, primarily due to its high labor cost, although it might have strong abilities in upstream industrial sections like research and development.

"Past experience showed that efforts to set up a chip facility in the US, for example the US plant of Taiwan Semiconductor Manufacturing Company (TSMC), has progressed slowly, which further underscores the difficulty of setting up chip factories in the US," he told the Global Times.

Other factors are straining the US as well, such as mounting debts that are restricting Washington's abilities to materialize subsidies, their manufacturing hollowing-out that leads to insufficiency in everything from workers to materials, as well as the fact that the US might soon have another president, analysts said.

According to Ma, there could be two results with the passage of the bill. First, it will not be implemented properly. Second, the US government could return to the "stick" approach if it receives scant support from companies. If the second way becomes reality, the world's semiconductor industry, which is already facing downward pressure, might enter a dark period with many companies going bankrupt, he said.

A worker checks a chip at Jade Bird Fire Co in Zhangjiakou, North China's Hebei Province, on March 27, 2022. Jade Bird makes firefighting products. Its self-developed Zhuhuan chip, which integrates fire detection capability, communication technology and integrated circuit technology, is widely used in China. Photo: VCGA worker checks a chip at Jade Bird Fire Co in Zhangjiakou, North China's Hebei Province, on March 27, 2022. Jade Bird makes firefighting products. Its self-developed Zhuhuan chip, which integrates fire detection capability, communication technology and integrated circuit technology, is widely used in China. Photo: VCG

China's rise

Despite US attempts to reshape the world's chip supply chains to a US-led one, China's chip industry is developing in a stable manner, be it the technologies or the markets, inspiring confidence among analysts that China will make breakthroughs in key chip technologies in about three to five years.

According to South Korean Customs statistics, South Korea's exports to China totaled $13.4 billion in May this year, while imports reached $14.9 billion, showing a deficit on the South Korean side for the first time, electronics information portal ijiwei.com reported.

One important stimulus for the situation is that China's exports of semiconductor products, which account for about one-sixth of the country's total exports to South Korea, surged 40.9 percent in the month, data provided by the Korea International Trade Association showed.

Besides, the rising popularity of China's electronic products like mobile phones has boosted demand for domestic chip products. For example, Chinese mobile phone brand Xiaomi recently launched a phone equipped with a China-made chip JR510, according to media reports.

On the technology side, Chinese companies are also making rapid progress. The country's chip giant Semiconductor Manufacturing International Corp (SMIC) said it had made a breakthrough in the first generation FinFET technology and entered mass production in Q4 of 2019, while the tech's second generation, rendered equivalent to the 7nm and 5nm manufacturing process of TSMC, is also in a period of pilot production.

SMIC's profits surged 147.7 percent on a yearly basis in 2021 in yuan's terms, the company's annual report showed.

According to Ma, China's sense of urgency for chip industrial independence has enhanced a lot over recent years. This is giving rise to strengthened input, from the industrial, research and university sides, into the industry, bringing positive results such as a surge in chip product categories from hundreds to thousands.

In terms of technologies, China is also "leaping in progress," he said, adding that though China still has several technological bottlenecks to break through, it should be able to solve those bottlenecks after 3-5 years of stable development.

Xiang predicted that the large-scale storage in China's chip industry will start in 2023, as compared with chips from Europe, the US and South Korea, China's domestic chips are of good quality, priced about 60 percent lower than that of other countries.

"In a sense, Chinese companies already have the ability to produce high-end chips, and they just need time to achieve mass production. The US chip blockade for China has in turn greatly facilitated the development of the country's chip industry," Xiang said. 

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