Last week, the US Department of Commerce issued comprehensive restrictions on chips, mainly aiming at my country's acquisition of high-end chips and components for manufacturing supercomputers. Richard Abrafia, managing director of Pneumatic Consulting, said in an acceptance to the media: "In terms of economic decoupling, semiconductors and aerospace are the two most worthy of attention. The biggest consequence will be the impact on China's own aircraft R&D plans. The biggest risk is the trade of technology and systems, and these technologies and systems are necessary to make these products work."
We have also stated many times that no matter how the international situation changes, China will adhere to the path of peaceful development and reform and opening up of . Even while supporting domestic innovation, China will not cut off its ties with the outside world.
U.S. exports of dual-purpose goods for military and civilians are also rising. Military and civilian dual-purpose goods can be used for both civilian and military purposes. Such commodities include technologies related to aerospace. Official U.S. trade data shows that from 2012 to 2018, China was the largest export market for American Airlines aerospace products, but since then, China's imports have declined as relations between the two countries deteriorated. Chip manufacturing and telecommunications are also in the category of dual use.
After a military conflict between Russia and Ukraine, the United States bans the export of dual-use items to Russia.
U.S. Commerce Secretary Gina Raymondo later said that the United States may also refuse to export equipment and software to Chinese manufacturers found to supply chips and other products to Russia. She had previously stated that Washington should cooperate with Europe.
Assia Kendler, Assistant Secretary of Commerce for Export Management of the Bureau of Industry and Security of the U.S. Department of Commerce, said export controls on dual-purpose items are an "evolving tool to adapt to national security and foreign policy situations." More broadly, major changes in U.S. trade policy have greatly complicated its trade relations and may prevent some countries from dealing with the United States more deeply. "It is clear that a range of other considerations, such as labor, environment, inclusion, resilience, sustainability and geopolitics, will be given priority than ever before," said Olson. While U.S. businesses have had a significant influence on trade policy in the past, now, their interests are more likely to be taken care of when their interests are aligned with the government's broader goals of sustainability, resilience and American workers.
Olson said: Although American companies face increasing difficulties in doing business in China and generally feel less popular, a considerable number of American companies are working hard to maintain the slogan of "no trouble" to make them powerful candidates to help repair U.S.-China relations.
Olsen added: "The influence of these companies may have weakened, at least relatively so."
After 14 years of development, China's own single-aisle passenger aircraft C919 finally obtained a model certificate last month.
However, this aircraft designed to compete with Boeing 737 and Airbus A320 heavily relies on imported parts, especially from U.S. suppliers. Previously, foreign media reported that the domestically produced C919 engine is under development, but it will still take several years.
The United States has included several Chinese aerospace companies on the sanctions list. These include China Aviation Industry Corporation, a major supplier of Chinese ARJ21 small regional passenger aircraft and C919.
China said that the development of the domestic aviation industry, including manufacturing C919, will help promote technological advances in other industries such as materials science, avionics and aerodynamics, while also ensuring it can meet the growing demand for air travel in the country. "The risk of losing these (foreign) technologies not only makes innovation and closing the gap difficult, but also makes it difficult to achieve other goals such as increasing productivity," said Gunter."
Abrafia said that if China sticks to its strategy of self-reliance in the aviation field, it will need to create a complete supply chain for its own system. Building this China-centric supply chain will take 10 to 15 years, costing tens of billions of dollars. It is hard to see a third option unless the relationship is repaired in some way and reverse the decoupling."
At the same time,Abrafia said the Chinese market is no longer as impressive as before. He pointed out that as demand weakens, the growth rate of air travel has begun to decline since before the epidemic.
Olson said: "Because the U.S. trade policy to China is a rather cross-party issue among members of Congress, economic efficiency is no longer a key driver. Businesses need to recognize that geopolitical factors will have to play an important role in their procurement, production and trade strategies. Over time, this will almost inevitably lead to some degree of decoupling with countries such as China and Russia, but the extent of decoupling remains to be seen. Globalization may slow down but will not be completely stopped."
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