Biden’s China Tech Crackdown Leaves Xi With Few Ways to Hit Back

Among the most notable firms on that list is emerging chip equipment-maker Shanghai Micro Electronics Equipment Group Co., or SMEE, which could stifle Beijing’s efforts to create next-generation semiconductors. The machines that make semiconductors are among the most complicated devices produced by humans and defy reverse engineering, making it difficult for China to develop its own domestic capabilities if it can’t get the equipment elsewhere.

“Having SMEE on the entity list is a major blow for China’s chip sector,” said Martijn Rasser, a former analyst at the Central Intelligence Agency who’s now a senior fellow at the Center for a New American Security think-tank.

“It’s the one company that Beijing saw as having potential to produce advanced chipmaking machines, which is essential for China to be a competitive force in the global semiconductor ecosystem,” he said. “Those hopes are now greatly diminished, if not dashed altogether.

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