China's Foreign Ministry (FM) on Wednesday slammed the US government's move to finalize a rule that reportedly will effectively bar Chinese technology from cars in the American market, saying the move is typical trade protectionism and economic coercion and urging the US to stop its unreasonable crackdown on Chinese firms.
US President Joe Biden's outgoing administration said on Tuesday that it is announcing actions to safeguard the US from national security risks associated with the exploitation of US connected vehicle supply chains by China and Russia, according to a Fact Sheet released by the White House.
The Fact Sheet said that the US Department of Commerce had issued a final rule that will ban the sale and import of connected vehicle hardware and software systems, as well as completed connected vehicles, from China and Russia.
The final rule will prohibit the import or sale of certain connected vehicle systems designed, developed, manufactured or supplied by entities with ties to China and Russia, including vehicle connectivity systems, or systems and components that connect vehicles to the outside world - including via Bluetooth, cellular, satellite and Wi-Fi modules - and automated driving systems, the White House said.
Reuters said that the move would effectively bar nearly all Chinese cars and trucks from the US market.
Asked to comment on the US move during a regular press conference on Wednesday, Guo Jiakun, a spokesperson of the Chinese FM, said that the US under the pretext of so-called national security made the decision without any factual basis to prohibit Chinese connected vehicle hardware and software systems, as well as completed connected vehicles, from being used in the US.
Such a practice disrupts economic and commercial cooperation between companies, violates the principle of market economy and fair competition, and is typical protectionism and economic coercion, Guo said.
The FM spokesperson expressed China's firm opposition and urged the US to stop the wrongful practice of overstretching the concept of national security, and cease the unreasonable suppression of Chinese enterprises. "China will take necessary measures to firmly defend its lawful rights and interests," Guo said.
In a statement on Wednesday night, the Chinese Ministry of Commerce expressed "strong dissatisfaction and firm opposition" to the Biden administration's intensive imposition of trade restrictions against China, including the restriction on Chinese vehicles.
"The Biden administration speaks one way and acts another. Relying on sanctions, containment, and suppression will not stop China's progress; it will only strengthen China's confidence and capability in self-reliance and technological innovation," the spokesperson said. "China will take measures to resolutely safeguard its sovereignty, security, and development interests."
The Biden administration's move has also sparked concerns from the US business community over the potential costs and disruption such a move would bring to US businesses.
The US Consumer Technology Association (CTA) expressed concerns to the US Department of Commerce about the potential increased costs and other impacts of the Biden administration's restrictions on Chinese software and hardware used in US vehicles, the Global Times learned from a document shared by the CTA on Wednesday.
The CTA is North America's largest technology trade association and represents the $505 billion US consumer technology industry, which supports more than 18 million US jobs, said the document.
The CTA, which is also the producer of the Consumer Electronics Show, said that the Bureau of Industry and Security (BIS) of the US Department of Commerce assesses that 42 to 281 entities will be potentially impacted by the proposed rule and that the initial cost burden for these entities is between $30,964 and $38,554.
However, the CTA finds it likely that these cost estimates are "dramatically understated," and it asked the BIS to revisit its proposed cost estimates. Anecdotal reports from industry experts expect a mid-six-digit to low-seven-digit cost burden, the document said.
Also, it is impossible to estimate to an accurate amount the true cost impact this rulemaking will have in the 30-day window of this comment period. At a minimum, the BIS must revisit its assumptions about the likely reach of this rule to reasonably and fully consider the costs it would impose, the CTA said.
Moreover, the BIS cost assessment fails to consider any potential unintended downstream impact, said the CTA.
"China's smart vehicle components are experiencing a rapid development boom, marked by a late start but fast growth. Meanwhile, US automakers still rely heavily on traditional American suppliers," Zhang Xiang, secretary general of the International Intelligent Vehicle Engineering Association, told the Global Times on Wednesday, noting that China's industry chain, including vehicle manufacturing, offers comparative advantages in both cost and technology.
Zhang warned that the Biden administration's decision targeting Chinese software and hardware could prevent US consumers from benefiting from China's technological advancements and affordable products, potentially leading to higher prices for smart vehicles. "This decision by the US government also limits collaboration between US automakers and Chinese suppliers, slowing technological progress and hindering the advancement of smart automotive development in the US," the Chinese expert said.
（Picture: Veer）
