Trade disputes will force China to localize advanced technology

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03:52

Senior fellow from the China Association of International Trade, Li Yong, says trade frictions between China and the US will force China to manufacture advanced technology locally.

Li says it will be very difficult for China to work with US high-tech companies in the future if the US restricts its investment and controls its exports. This will lead to a very difficult situation in China, since 90 percent of the world’s high-end chips are all from the US. In this regard, China has to work on itself to manufacture high technology.

Li Yong, senior fellow from the China Association of International Trade. /CGTN Photo

Li adds that the reason why the US is targeting China’s semiconductor industry is because China has caught up with the US in terms of technology, which makes the Trump administration very uncomfortable.

However, the tariffs will lead to financial losses for the US high-tech industry. He says China has developed the processing industry, and many chips are shipped to China for testing, sealing, assembly, and then sent back to the US—which is how the value chain and the supply chain work.

Therefore, he asserts, the whole process will be subjected to tariffs twice, a major burden for US companies.