Valdai Club

On April 13, the Valdai Club hosted an expert discussion, titled “The Global Chip Race: What Will Be the Outcome for Russia, the US and China?”, timed to coincide with the release of the new Valdai Paper “The US CHIPS and Science Act and Its Impact on Russia’s High-Tech Sector”. Discussion moderator Ivan Timofeev, programme director of the Valdai Club, noted that this law is an example of how changes in the regulatory framework of the United States can have global consequences, including in China and Russia, since US export controls cover the vast majority of the high technology sector.

One of the authors of the Paper, Stanislav Tkachenko, head of the master's programme in Diplomacy at St. Petersburg University, after briefly analysing the possible causes and consequences of the adoption of the law, outlined its possible impact on Russia. He considers attempts to create a network of ties with other states aimed at neutralising the negative impact of American policymaking to be a natural reaction on the part of Russia. Here we are talking not only about ties with China - the number of partners needs to be expanded as much as possible. “In the long term, the United States would like to break away from its competitors even further, but we see that the sanctions that are directly laid down in the law do not work,” Tkachenko said.

Another author of the Paper, Andrei Terekhov, head of the system programming department of the Faculty of Mathematics and Mechanics at St. Petersburg University, said that until recently, neither the state nor private customers wanted to pay for the development of software production tools; both ordered final products. According to him, this created many problems, including security risks. Now such orders have begun to arrive, he said. Speaking about the production of chips in Russia, Terekhov stressed that the loss of the ability to import microcircuits from Taiwan has also created a serious incentive for the development of such production.

Nelson Wong, vice president of the Shanghai Centre for Strategic and International Studies, called what is happening a technological war against China, the largest importer of chips in the world. He acknowledged that China is lagging behind America in chip development, but expressed confidence that China will be able to catch up with its main competitor. In his opinion, the American law provided China with a serious impetus to create its own industry. Unfair competition is a game that can turn against the United States itself, Wong is convinced. “The Americans are digging a hole for themselves, trying to stop China,” he concluded.

Ruslan Yunusov, co-founder of the Russian Quantum Centre, suggested that American attempts to move the production of chips and technological equipment to the country and bans on scientific and technological cooperation with Russia and China resemble preparations for a full-fledged war. In particular, in the event of a war over Taiwan, the chip market will collapse and production will stop. China is taking similar measures to build an internal, autonomous system for the production of chips in response. At the same time, if the confrontation remains at an economic level, the prospects of the parties in the long run will directly depend on the huge number of people in the market. Thus, much may depend on which side India and Africa take.