China can "weaponize" drug exports in retaliation for US chip restrictions

China can “weaponize” drug exports in retaliation for US chip restrictions


China will be able to “weaponize” exports of drugs and drug precursors if the US cuts off its access to computer chips as supply chain security becomes a major topic. in the upcoming US presidential election.

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The United States is heavily dependent on drugs imported from China, and this is something that both US President Donald Trump and Democratic candidate Joe Biden have pledged to deal with after the corona virus epidemic has revealed many downsides. in the country’s pharmaceutical and medical equipment supply.

Both Trump and Biden pledged to move manufacturing of basic medical supplies back to the United States, creating more jobs, and loosening dependence on foreign manufacturers like China.

Although Beijing has not yet used pharmaceuticals to pressure the United States, its eminent economist Li Daokui has said that China can limit the US’s access to drugs if it is forced to buy semiconductors, SCMP citing the former member of the Central Bank’s Monetary Policy Advisory Committee to respond to local media.

“As for vitamins and antibiotics, more than 90% of their raw materials are made in China,” Mr. Li said. “The United States certainly won’t be able to produce them in the short term. Of course, we won’t go to war first, but if America dares to play dirty, we will have countermeasures. ”

In recent months, US-China relations have fallen to the lowest level related to many issues, including trade, diplomacy, COVID-19 pandemic and Hong Kong.

The US Commerce Department last week continued to restrict Chinese telecom giant Huawei from accessing American technology and software, prompting an escalating technology war between the two powers.

To prevent export circumvention, the US trade agency added 38 Huawei branches across 21 countries to the “entity list” to limit the sale of key US technology to companies. This Chinese company.

Mr. Li, who is also a finance professor at Tsinghua University in Beijing, said that the United States will continue to “block” China’s access to technology by strengthening sanctions against companies like Huawei, but completely cutting Chinese companies from chip supplies is a US “nuclear option”.

“Disrupting the Chinese economy is equivalent to going to war with the Chinese on food. Then, China will talk to the US about drug supply, won’t it? ” he said.

> How can just a few US companies paralyze Huawei’s supply chain?

According to Mr. Li, China should also prepare for the “very real” risk that the US could cut the Chinese banks’ access to the international SWIFT system. As a result, Chinese banks are revising their plans to deal with unexpected incidents in case they are prevented from using the system.

Mr. Li also said that ripping Chinese banks out of the SWIFT system would be “economic terrorism” and the two sides need to talk to each other.

“We’re ready to negotiate, but if you are unreasonable, we will fight you to the end at all costs,” he said.

In a recent interview with the channel Fox NewsMr. Trump said the US would “separate” from China if “They don’t treat us properly”. Mr. Trump’s reelection campaign has turned things off “End our dependence on China” become an important part of the political arena.

Meanwhile, top trade negotiators from both countries have held the first high-level trade talks since the signing of the Phase I Trade Treaty in January on Tuesday. 8) past. The meeting has been described as the only remaining constructive bright spot in the rifting relationship between the two superpowers.

Accordingly, both sides promised to promote the implementation of the commercial agreement.

According to Mr. Li, the future US-China relations will be “an era of intense game” that can go beyond simple concepts such as “separation”.

Xuan Lan (from SCMP)

See more:

  • China is reluctant to retaliate against American companies over the “death penalty” for Huawei

  • FT: India removes Huawei and other Chinese suppliers from the telecom system

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