Page 204 - 2022 White Paper on the Business Environment in China
P. 204
2 White Paper on the Business Environment in China
law will change. When it does, consumers will see wide range of gadgets. Concerns about supply
a massive transformation in the way goods are uncertainty have occasionally led chip buyers and
shipped around the world. distributors to purchase more chips than they
need, creating a vicious cycle that further drives
China is the world's No. 2 market for self-driving up prices. Investors have piled into the shares
technology after the United States. In total, Baidu of chipmakers as a worldwide shortage shows
is testing fully driverless vehicles in three Chinese little sign of easing and as sales of electric cars
cities and is testing its technology with safety from China to Europe and the US increase. Such
drivers in more than two dozen cities. Baidu has companies have also largely escaped Beijing’s
even received permission to test fully driverless crackdown on internet companies to address the
vehicles near its Silicon Valley offices in Sunnyvale. “tough problems” of the industry, a move that’s
Another Chinese company, AutoX, has been testing had a devastating impact on Big Tech and more
fully driverless vehicles in Shenzhen since 2020. recently been felt by China’s online education
The service has been open to select members of sector. Chinese automakers import about 90% of
the public, though AutoX hasn't started charging the high-end chips they require and the shortage
for rides. Several other Chinese companies are hits them in particular. June car sales fell 12.6%
working on self-driving technology. So far, US from the previous month, the China Association
policymakers have largely taken a hands-off of Automobile Manufacturers said, with officials
approach to the technology. There are very few pointing to supply constraints as the root cause. As
regulations of autonomous vehicles at the federal the global chip shortage persists, particularly in the
level. States have taken a variety of approaches, auto sector, a hike in pricing has been a common
with California having stricter rules than states theme discussed by semiconductor executives this
like Arizona and Texas. The prospect of robust earnings season. In June, the chief executive of US
competition from China may help autonomous chipmaker Intel said he expected the shortage to
vehicle companies convince US policymakers not hit bottom by year-end, with the market returning
to pass regulations that could slow development to normal only by 2023 (Al Jazeer).
of the technology in the US (Lee).
Works Cited
Chip Shortage
Al Jazeera. “China Regulators Have a New Target:
China’s regulatory agency launched an CHIP DISTRIBUTORS.” Automotive Industry News
investigation into chip distributors in the auto , Al Jazeera, 3 Aug. 2021, www.aljazeera.com/
industry, citing suspicions of price gouging. The economy/2021/8/3/china-regulators-have-a-new-
action by the State Administration for Market target-chip-distributors.
Regulation (SAMR) is the latest in a regulatory
crackdown over the past year that has targeted a Bigg, Martin. “China Reveals Full-Size Pickup to
range of companies and industries as the Chinese Fight Ford F-150 and Ram 1500.” CarBuzz, CarBuzz,
government clamps down on industry. The firms 10 June 2021, carbuzz.com/news/china-reveals-
were suspected of driving up prices, based on price full-size-pickup-to-fight-ford-f-150-and-ram-1500.
monitoring and reporting clues, the agency said in
its statement, and vowed to investigate and punish Bruce, Chris. “General Motors Launches $9,000
illegal acts such as hoarding, price-gouging and Pickup Truck in China.” Motor1.Com, Motor1.Com,
collusion. China’s CSI All Shares Semiconductor & 19 Mar. 2021, www.motor1.com/news/495523/
Semiconductor Equipment Index fell by roughly 6% wuling-zhengtu-pickup-truck-china/.
after the news. Some Asian chip stocks outside of
China tied to the auto industry also fell. A global CGTV. “Beijing Permits Self-Driving Vehicle
shortage of chips that began in December 2020 Testing on Expressways.” Technology, CGTV,
disrupted supply chains and the hardware sector 30 July 2021, news.cgtn.com/news/2021-07-30/
worldwide. Though initially concentrated in the Beijing-permits-self-driving-vehicle-testing-on-
automotive sector, it has since spread to affect a expressways-12jlkrsvhV6/index.html.
204
law will change. When it does, consumers will see wide range of gadgets. Concerns about supply
a massive transformation in the way goods are uncertainty have occasionally led chip buyers and
shipped around the world. distributors to purchase more chips than they
need, creating a vicious cycle that further drives
China is the world's No. 2 market for self-driving up prices. Investors have piled into the shares
technology after the United States. In total, Baidu of chipmakers as a worldwide shortage shows
is testing fully driverless vehicles in three Chinese little sign of easing and as sales of electric cars
cities and is testing its technology with safety from China to Europe and the US increase. Such
drivers in more than two dozen cities. Baidu has companies have also largely escaped Beijing’s
even received permission to test fully driverless crackdown on internet companies to address the
vehicles near its Silicon Valley offices in Sunnyvale. “tough problems” of the industry, a move that’s
Another Chinese company, AutoX, has been testing had a devastating impact on Big Tech and more
fully driverless vehicles in Shenzhen since 2020. recently been felt by China’s online education
The service has been open to select members of sector. Chinese automakers import about 90% of
the public, though AutoX hasn't started charging the high-end chips they require and the shortage
for rides. Several other Chinese companies are hits them in particular. June car sales fell 12.6%
working on self-driving technology. So far, US from the previous month, the China Association
policymakers have largely taken a hands-off of Automobile Manufacturers said, with officials
approach to the technology. There are very few pointing to supply constraints as the root cause. As
regulations of autonomous vehicles at the federal the global chip shortage persists, particularly in the
level. States have taken a variety of approaches, auto sector, a hike in pricing has been a common
with California having stricter rules than states theme discussed by semiconductor executives this
like Arizona and Texas. The prospect of robust earnings season. In June, the chief executive of US
competition from China may help autonomous chipmaker Intel said he expected the shortage to
vehicle companies convince US policymakers not hit bottom by year-end, with the market returning
to pass regulations that could slow development to normal only by 2023 (Al Jazeer).
of the technology in the US (Lee).
Works Cited
Chip Shortage
Al Jazeera. “China Regulators Have a New Target:
China’s regulatory agency launched an CHIP DISTRIBUTORS.” Automotive Industry News
investigation into chip distributors in the auto , Al Jazeera, 3 Aug. 2021, www.aljazeera.com/
industry, citing suspicions of price gouging. The economy/2021/8/3/china-regulators-have-a-new-
action by the State Administration for Market target-chip-distributors.
Regulation (SAMR) is the latest in a regulatory
crackdown over the past year that has targeted a Bigg, Martin. “China Reveals Full-Size Pickup to
range of companies and industries as the Chinese Fight Ford F-150 and Ram 1500.” CarBuzz, CarBuzz,
government clamps down on industry. The firms 10 June 2021, carbuzz.com/news/china-reveals-
were suspected of driving up prices, based on price full-size-pickup-to-fight-ford-f-150-and-ram-1500.
monitoring and reporting clues, the agency said in
its statement, and vowed to investigate and punish Bruce, Chris. “General Motors Launches $9,000
illegal acts such as hoarding, price-gouging and Pickup Truck in China.” Motor1.Com, Motor1.Com,
collusion. China’s CSI All Shares Semiconductor & 19 Mar. 2021, www.motor1.com/news/495523/
Semiconductor Equipment Index fell by roughly 6% wuling-zhengtu-pickup-truck-china/.
after the news. Some Asian chip stocks outside of
China tied to the auto industry also fell. A global CGTV. “Beijing Permits Self-Driving Vehicle
shortage of chips that began in December 2020 Testing on Expressways.” Technology, CGTV,
disrupted supply chains and the hardware sector 30 July 2021, news.cgtn.com/news/2021-07-30/
worldwide. Though initially concentrated in the Beijing-permits-self-driving-vehicle-testing-on-
automotive sector, it has since spread to affect a expressways-12jlkrsvhV6/index.html.
204
