China has fired the latest shot in the ongoing trade war with the US, passing legislation to restrict exports of sensitive technology.
The US has been working to isolate Chinese firms it deems as a threat to privacy and security. Huawei and ZTE have both been banned, with US officials pressuring allies to do the same. The US has also used export controls to cut Huawei off from its chipmaking suppliers, such as TSMC. The Trump administration also threatened to ban TikTok, unless the social media app was sold to a non-Chinese company.
In retaliation, China threatened to block the sale of specific technologies, including the algorithm that is at the heart of how TikTok functions. Now, according to Bloomberg, the National People’s Congress Standing Committee has passed a law prohibiting the export of sensitive technology, including by companies that have foreign investors. The law goes into effect on December 1.
It remains to be seen how widespread the impact will be, as there is very little information available about the law’s reach. We will continue to monitor and update as the story develops.