Estevez 'Bullish' on Multilateral China Chip Controls, Says More Restrictions Coming
The Bureau of Industry and Security is confident it will soon convince allies to adopt similar semiconductor export controls on China, Undersecretary Alan Estevez said, adding that he expects some type of “multilateral deal” finalized in the “near term.” Estevez, speaking during an Oct. 27 event hosted by the Center for a New American Security, also said BIS isn’t “done” imposing chip-related controls and said companies should expect new restrictions on emerging technologies, including on biotechnologies, artificial intelligence software and items in the quantum sector.
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Estevez said the new semiconductor controls, which are designed to restrict China’s ability to acquire advanced computing chips and manufacture advanced semiconductors (see 2210070049), were meant to show allies that the U.S. “has skin in the game.” BIS views the restrictions as a “down payment” to convince allies to follow suit, he said.
Discussions on a set of multilateral restrictions have been “good. I'm very bullish,” Estevez said. “I have zero confidence that we're not going to have a deal.” But he also declined to publicly announce a timeline. “I have the timeline in my mind of what we're working for. It's not just me, it's the national security adviser, the secretary of commerce are all on the phone working this,” Estevez said. “We expect to have a deal done in the near term.”
The U.S. could use incentives to convince allies to impose similar controls, Estevez said, similar to when it created a list of countries earlier this year that are excluded from certain license requirements under the U.S.’s two recently issued foreign direct product rules related to Russia (see 2202240069).
If allies impose controls similar to the U.S.’s restrictions on China, Estevez said, “we’d give them a carveout” similar to the Russia exemption. Those countries could be exempted from certain license requirements imposed by foreign direct product rule restrictions introduced under BIS’s new October rule. “My belief is to be judicious in the use of the FDPR,” he said. “But it is a tool in the toolbox … when we have to use it, we're going to use it.”
He also addressed concerns that the FDP rule restrictions could encourage China to more quickly indigenize its advanced technology sector. “They’re putting a lot of money into this,” Estevez said. “I wouldn't discount Chinese ingenuity and capability.” He said the U.S. needs to make sure it's innovating and advancing its chip technologies to remain in front of China. “We're not trying to keep two generations ahead,” Estevez said. “We're now just trying to keep ahead.”
Estevez also said BIS plans to issue guidance on the new controls, including the new restrictions on U.S. persons’ ability to support certain activities at certain China-based chip facilities. “I think the U.S persons thing surprised a lot of people,” Estevez said, adding that the agency plans to issue a frequently asked question on the restriction. “We're working through where our real lines are on that.”
The agency is also working on more restrictions for semiconductor exports to China. Estevez announced a review of the agency’s chip export controls in July (see 2207150023) and stressed this week that the latest controls don’t signal the completion of that review.
Estevez said he is constantly asked: “When will that China review be done? And that China review will be done when the Chinese change their behavior.” He said BIS is “going to continue to look at not just what we did, semiconductors, but other areas that the Chinese are using to threaten the United States and its allies.”
Aside from its work on China, the agency is still pursuing new controls on emerging and foundational technologies. In response to a question about whether BIS could place controls on quantum information science items, biotechnologies and AI software and algorithms, Estevez said it’s likely.
“Of course they are technology areas that are on my radar,” he said. “So will we end up doing something in those areas? If I was a betting person, I would put down money on that.”