Intel’s Xinjiang statement full of calculations and speculations

In a recent open letter from US tech company Intel to its suppliers, the company claimed that it is "required to ensure our supply chain does not use any labor or source goods or services from the Xinjiang region." Although this is not at the top of more than a dozen of requirements from Intel, it still offends the eyes of the Chinese people as it is so absurd.

Entering the Chinese market in 1985, Intel was one of the first American companies in the country following China's reform and opening-up. It has reaped huge benefits from China in the past decades. In 2020, 26 percent of Intel's revenue came from the Chinese mainland and Hong Kong and nearly 10 percent of the company's properties, factories and equipment are located in China. Therefore, it is justified for Chinese netizens to feel discontent and accuse Intel of "biting the hand that feeds it."

The Global Times has learned that products from Xinjiang constitute only a tiny fraction even if they are involved in Intel's supply chain. The exclusion of Xinjiang products from the supply chain is not a case of "cutting off one's poisoned arm to survive." It is more like plucking a mushroom from a dense tropical rainforest, which is not detrimental at all to the company's actual interests. Some analysts believe that Intel's Xinjiang statement is not simply a move made by a corporation. It is more about proving the company's own innocence under the pressure of the extreme political environment in the US, as well as pleasing the US society with some "fine words."

Today, to suppress China, the US is not only asking its allies to have a greater binding force but also attempting to coerce major US companies into taking sides. Washington is using technology "decoupling" as a grip in its comprehensive strategy to contain and suppress Beijing. This includes semiconductors, which are seen as the most important and sensitive commodity and has become the main focus.

It is reported by US media that the White House rejected Intel's plan to expand chip production capacity in China. However, on one hand, Washington is unwilling to see US companies expand production in China. On the other, it is unable to introduce policies that will benefit those high-tech companies. The so-called Creating Helpful Incentives for Producing Semiconductors for America and Foundries Act that aims to support US chip research and development has been in debate for months in the House of Representatives.

As for the multinational companies, they should be able to endure, properly handle and balance pressures from all parties. This is the basic skill they are supposed to have. But Intel's moves are speculative. It is likely that the company is making a gesture by ignoring facts and taking a high profile on the so-called human rights issues to bargain with the US government in other areas. Perhaps it is also hoping to use "political pressure" as an excuse to gain China's understanding. But this is only a mission impossible.

China does not have to take too seriously the calculation of interests between Intel and politicians in Washington. This is their business. Just let them get entangled. The most important point that the incident reminds us of is that we must speed up the process of producing home-made chips in China. An important reason why Intel dares to offend China over the Xinjiang-related affairs is that it holds the monopoly of the global chip market.

What we need to do is to make it increasingly expensive for companies to offend China so their losses outweigh their gains. In fact, Washington in recent years has launched a technology crackdown against China which has forced China to accelerate its space of independent research and development. As far as chips are concerned, although there is still a gap between China and the US in high-end chips, the gap is narrowing. Those calculations and speculations that ignore facts will not be worth a penny eventually, and only become a historical joke.