China will soon impose export controls on certain unmanned aerial vehicles and related equipment in what is said is an effort to safeguard its national security. The restrictions, effective Spet. 1, will cover certain UAVs and their engines, infrared imaging equipment, radars, lasers, radio communication equipment, jamming equipment and more, China’s Ministry of Commerce announced July 31, according to an unofficial translation. It added that “all other civilian drones that are not included in the control are prohibited from being exported for military purposes.”
Exports to China
Two U.S. semiconductor companies said they still see opportunities to sell into the Chinese market despite sweeping export controls announced by the U.S. in October (see 2210070049) and potentially more restrictions coming soon.
The Committee on Foreign Investment in the U.S. continued to see an increase in notices last year and initiated the most investigations since 2017, CFIUS said in its annual report to Congress released this week. The committee received 286 notices during calendar year 2022, a slight increase from the 272 it received in 2021, and began 162 investigations into transactions, 32 more than in 2021 and close to double the amount from 2020.
Investors in Mississippi's public employees' retirement system sued Seagate Technology Holdings for deceiving its investors and causing them to buy Seagate stock at "artificially inflated prices" related to its conduct in illegally exporting hard disk drives to China. (Public Employees' Retirement System of Mississippi v. Seagate Technology Holdings, N.D. Cal. # 3:23-03711).
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The top lawmakers on the House Select Committee on China urged the Commerce Department to strengthen its Oct. 7 China chip controls, saying Chinese firms have “identified workarounds.” In a letter last week to Commerce Secretary Gina Raimondo, Reps. Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., said the interim final rule’s threshold for the “bidirectional transfer rate of 600 Gbyte/s should be lowered sufficiently to prevent clever engineering that bypasses the regulations.” They also said the rule, which will be updated in the coming months when finalized by the Bureau of Industry and Security (see 2307260071), should address Chinese firms using cloud computing services to “outsource their advanced computing needs” and evade the export controls (see 2303210037 and 2305160092).
The U.S. Court of Appeals for the 9th Circuit, in a July opinion, reversed a California district court's decision acquitting Yi-Chi Shih, an employee at China-based firm Chengdu RML, of conspiracy to violate export control laws via his export of semiconductors to China. Judges Andrew Hurwitz and Ryan Nelson said "a rational factfinder could find that the exported [monolithic microwave integrated circuits] were not exempt from the [Export Administration Regulations] as fundamental research."
The Senate last week passed its version of the FY 2024 National Defense Authorization Act with several trade-related amendments, including one that could establish a notification regime for, but not restrict, certain outbound investments (see 2307260029).
The Semiconductor Industry Association this week released a report on the state of the American chip industry, highlighting issues surrounding U.S. Chips Act implementation, the manufacturing industrial base, global chip demand, American technological competitiveness, geopolitical tensions impacting the industry and more.
Colombia, Canada, Argentina, Mexico and Brazil recently announced antidumping and countervailing duty actions and decisions on certain products from mainland China, the Hong Kong Trade Development Council reported July 27.