Useful, but Insufficient

The Biden administration is looking to restrict—but not block—Peoples Republic of China companies from accessing American cloud-computing services.

That’s a useful move, to the extent it actually comes to fruition and to any meaningful extent, but it’s not enough by itself, or even against the backdrop of existing restrictions on technology exports to the PRC.

Some are concerned, though, that this could further strain relations between the world’s economic superpowers.

[The Peoples Republic of China] set export restrictions on two minerals the US says are critical to the production of semiconductors, missile systems and solar cells….
The minerals—gallium and germanium—and more than three dozen related metals and other materials will be subject to unspecified export controls starting August 1, Beijing’s Ministry of Commerce said Monday.

The particular PRC response just shows the importance of us moving our supply chains completely out of the PRC, and it emphasizes the shamefulness of American company managers for their slowness in making the necessary adjustments in their businesses.

Beyond that, we need to stop this foolish call and response method of restrictions on technology exports to the PRC. We need to apply the restrictions faster and deeper than they can respond. Simply doing tit-for-tat moves lets the PRC adapt and respond, especially to respond with more pain inflicted on us than would be the case if we stayed solidly inside their Do Loop.

The PRC’s response looks more like escalation than tit-for-tat. They’re already moving to get inside our Do Loop while the Biden administration tiptoes around.

Those concerned need to identify the war—and the PRC is inflicting war on us, even if it’s not, yet, kinetic—in which one side suffers no consequences during the war. Of course friendly-side damage needs to be minimized, but wars are won by inflicting more pain on the other side than that other side is willing to suffer than that other side can inflict on the one compared to the one’s pain tolerance.

Nor is it enough simply to restrict our technology exports/transfers to the PRC to tech that’s our second tier/prior generation technology. Our exports/transfers—to the extent we make any at all—needs to limited to what would constitute the PRC’s second tier/prior generation technology. If our own such tech is ahead of the PRC’s, those exports still would enable the PRC’s catchup and gaining superiority.

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