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China must prepare for 'long tech march' following U.S. restrictions on SMIC: Global Times

FILE PHOTO: Chinese and U.S. flags flutter near the Bund in Shanghai, China July 30, 2019. REUTERS/Aly Song/File Photo

SHANGHAI (Reuters) - China must engage in a new "long march" in the technology sector now that the U.S. has imposed export restrictions on Semiconductor Manufacturing International Corp 0981.HK, the country's largest chip manufacturer, Chinese state-backed tabloid the Global Times wrote on Sunday.

The unnamed author of an op-ed in the paper here argues that the U.S' dominance of the global semiconductor industry supply chain is a "fundamental threat" to China.

“It now appears that China will need to control all research and production chains of the semiconductor industry, and rid itself of being dependent on the U.S.,” the author wrote.

On Saturday, Reuters reported that the U.S. had sent letters to companies informing them that they must obtain a license to supply SMIC.

The letter stated that SMIC and its subsidiaries “may pose an unacceptable risk of diversion to a military end use.” SMIC has denied any ties to China’s military.

The restrictions against SMIC, and earlier ones against Huawei Technologies Co Ltd [HWT.UL], the op-ed author argues, illustrate that the U.S is leading a protracted battle of “high-tech suppression” against China.

Although companies such as Tencent Holdings Ltd 0700.HK and Beijing ByteDance Co Ltd have made some tech breakthroughs, they are based on U.S. chip technology, the op-ed argues.

“The foundation of the entire industry is still in Americans’ hands. For now at least. China must leap from zero to one to provide solid support for the country’s competition with the U.S.,” the author wrote.

The Global Times is a tabloid published by the People’s Daily, the official newspaper of China’s ruling Communist Party, but does not speak on behalf of the party and government, unlike its parent publication.

Reporting by Josh Horwitz. Editing by Gerry Doyle

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