Semiconductor chip imports to China fell at a year-on-year rate of 16% in 2023, to US$377 billion.
In 2022, China reduced these foreign purchases 3.9%, according to data from that country’s General Administration of Customs.
Semiconductor chips are essential in the circuitry of various products. These include inverters, integrated chargers, computers, telecommunications devices, automotive sensors and consumer electronics. They are also used in control systems and industrial automation.
However, semiconductor chip manufacturing declined in the early 2020s. This was due to factory closures due to Covid-19. Then, with the reopening of fabs, demand for products containing semiconductor chips began to grow.
Semiconductor chip imports to China
A report by the U.S.-China Economic and Security Review Commission notes that restrictions imposed by the United States in 2022 have slowed China’s ability to develop and manufacture advanced semiconductors. These restrictions have limited its access to key segments of the chip industry that could strengthen its military.
The report also shows how these measures led China to intensify its efforts. For example, it has sought to attract foreign talent to its chip industry, circumvent export controls and expand its espionage activities. It has also promoted local innovation.
In September 2023, Huawei launched a smartphone that reportedly uses a Chinese-made chip with 5G performance capability, despite U.S. restrictions. However, China’s ability to produce these chips on a large scale within the country remains uncertain.
Labor capacity
In China, unequal access to quality education is evident. The difference between urban and rural areas affects the country’s ability to develop a skilled workforce throughout the country.
On the other hand, the report indicates that this has several implications for the United States. In the short term, Party- and state-led initiatives in China, which direct resources to strategic sectors such as artificial intelligence and semiconductors, could pose challenges for the United States. In the long term, however, shortcomings in China’s education system could limit its economic and technological competitiveness.