Why is China investigating US government subsidies for semiconductors?

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China Initiates Investigation into US Semiconductor Subsidies Amidst Unfair Competition Claims

China has announced an investigation into U.S. government subsidies provided to its semiconductor sector, a move spurred by complaints from China's mature node chip industry. This investigation stems from allegations that these subsidies have granted U.S. enterprises an unfair competitive advantage, leading to the export of relevant mature node chip products to China at artificially low prices.
Allegations of Unfair Competitive Advantage

The Chinese commerce ministry stated that substantial subsidies from the U.S. government have enabled American companies to gain an inequitable edge in the market. This advantage, according to Beijing, has facilitated the export of mature node semiconductor products to China at prices that undermine the legitimate rights and interests of China's domestic industry. This situation has prompted the request for a formal investigation into the matter.
Focus on Mature Node Chips

The investigation specifically targets subsidies related to mature node semiconductors. These chips, unlike advanced semiconductors used for artificial intelligence, are larger and designed for less complex applications such as home appliances and communication systems. The mature node sector in China has voiced concerns that the influx of low-priced U.S. imports, allegedly bolstered by subsidies, is damaging their market position.
Mirroring U.S. Actions and Trade Tensions

Beijing's current accusation closely mirrors the rationale cited by the Biden administration for its own recent actions concerning Chinese chip imports. The U.S. had previously announced tariff hikes on Chinese chip imports and launched a probe into China's mature chip node industry, citing concerns over expanded capacity, price manipulation, and the impact of Chinese state funding on competition. This reciprocal dynamic underscores the ongoing trade tensions within the global semiconductor landscape.

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Why is China investigating US government subsidies for semiconductors?

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