US' double standards: Approved 70% of export license applications from China in 2022, despite tech war

US' double standards: Approved 70% of export license applications from China in 2022, despite tech war

The US approved 70 per cent of export licenses from China despite warning other countries to not do business with them. The US allowed a loophole which allows China to do business with American businesses despite the existence of a sanctions list.

The United States would have its allies believe that doing business with China is counterproductive and that we need to curtail trade with Chinese businesses as much as we can, especially when it comes to technology-based businesses. Owing to that, the US, it seems has gone on a full-blown cold war against China, and has been trying to stifle their semiconductor programme.

Also read: Major blow to China’s plan to dominate silicon production as Netherlands curbs chip-related exports to China

However, in 2022, the year when the US went all out and tried to convince several of its allies, such as Japan and the Netherlands to restrict its trade with China as well as to restrict China from selling their products in their market, the US Commerce Department and other government agencies approved about 69.9 per cent of export licence applications.

What tech war?
Alan Estevez, Under Secretary of Commerce for Industry and Security, will testify before the House Foreign Affairs Committee that the US government rejected or returned 30.1 per cent of such permit applications without action.

“Approvals of any licences involving China are not loopholes in our controls,” Estevez said, adding “licence applications for China had an average processing time of approximately 77 days, which was considerably greater than the average processing time of approximately 40 days for all instances.”

Also read: Final nail in the coffin for China: US, Netherlands and Japan enter into agreement for chip sanctions

At the meeting headed “Combating the Generational Challenge of CCP Aggression”, Estevez will tell legislators China “remains a major focus of our enforcement efforts, and we will continue to prioritise this work in the coming year”.

According to Estevez, the Commerce Department’s Bureau of Industry and Security (BIS) has over 639 China-based organisations on its trade blacklist, known as the Entity List, with over 155 of those introduced during the Biden administration.

Companies on the Entity List are restricted from receiving US-origin goods and technology.

The cleverly crafted loophole of maintaining two lists.
The US, in its self-serving interest, maintains two lists one that really, properly bans certain companies from doing business with American companies, and one that only acts as a warning, the Unverified List.

The Commerce Department also keeps the Unverified List, which mandates reviews for the use of US technology. Estevez said BIS performed about 1,151 end-use checks in around 54 nations, where roughly 75 per cent of checks were deemed favourable.

Also read: After Japan and Netherlands, the US goes after South Korea to block their chip trade with China

He supported the limits, particularly those on imposed on semiconductors and related technology.

“These adjustments are intended to resolve worries about advanced semiconductor production,” Estevez explained. “These controls are not meant to halt manufacturing of legacy semiconductors, and these controls are not instruments of economic protectionism. They are tools for national security and international strategy.”

In October, BIS cautioned that unverified users might be transferred to the more limited Entity List. Estevez stated that after checks in late 2022, 25 of 28 organisations were deleted from the unverified roster. “This cooperation will continue in 2023, but we will continue to carefully watch cooperation,” Estevez said.

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