WASHINGTON (Pakistan Point News / Sputnik - 31st January, 2023) Trade restrictions on China's microchip industry could be harmful to the global economy, the International Monetary Fund (IMF) Chief Economist and Director of the Research Department Pierre-Olivier Gourinchas said during a press conference.
"Our analysis suggests that such reshoriing... would be something that potentially could be harmful to the global economy," Gourinchas said on Monday night when asked about impact of Japan and the Netherlands agreeing to adopt certain US export controls on China's chip-making industry.
Gournichas added that the IMF is looking at these developments in the semiconductor sector and trying to understand its implications for the global economy.
The IMF official reemphasized that their initial analysis suggests that moves by the United States and its allies will not necessarily leads to stronger growth.
The United States has reached a deal with Japan and the Netherlands to restrict China's access to their advanced semiconductor chip-making technology, according to media reports. Several key companies in Japan and the Netherlands, as part of the agreement, will implement some US export control measures the United States adopted in October.
The new agreement will restrict China's access to semiconductor technology from Dutch firm ASML and Japanese firms Nikon Corp and Tokyo Electron Ltd., media reported.
Dutch Prime Minister Mark Rutte said that it is unclear if the Netherlands will disclose details about the agreement.
In October, the Biden administration expanded controls on the export of US semiconductor technology going to China to restrict Beijing's ability to make certain high-end microchips used in military applications. Beijing took the matter to the World Trade Organization (WTO), filing a lawsuit challenging the US export controls.
