US BIS Closes Advanced Chip Export Loophole for Chinese Overseas Subsidiaries

The US Department of Commerce Bureau of Industry and Security issued new guidance aimed at closing loopholes in export controls targeting Chinese entities. The update applies to foreign-registered companies if their actual headquarters and control belong to a mainland China entity. This move effectively extends restrictions to overseas subsidiaries of Chinese firms.

China condemns unilateral bullying disrupting global semiconductor supply chains

BIS claims the new rules merely clarify existing 2023 licensing requirements rather than adding new restrictions. A spokesperson stated the guidance is not an expansion of current controls but a refinement of established rules. US officials maintain that the update merely clarifies existing licensing requirements rather than imposing new restrictions, even as Chinese authorities criticize the expanded scope of the rules.

China's Ministry of Commerce responded sharply to the announcement. Spokesperson He Yongqian condemned the actions as unilateral bullying that harms Chinese enterprises' legitimate rights and disrupts global trade order. He emphasized the negative impact on the stability of the global semiconductor supply chain.

The guidance targets advanced chip exports used in artificial intelligence applications. The restrictions focus on entities involved in developing or deploying AI technologies. China's Ministry of Commerce condemned the rules as unilateral bullying that harms legitimate business rights and disrupts global semiconductor supply chains.