China’s response to US chip move limited by economic reality

Beijing’s restrictions on American chipmaker Micron in retaliation to sweeping US chip curbs marks a major step up in its response to Washington’s pressure and could open the door for further measures in the geopolitical standoff, analysts say.

But they warned President Xi Jinping’s ability to raise the stakes will be limited as he battles to re-energise the world’s number two economy while it struggles to recover from years of zero-Covid-imposed inertia.

China on Sunday banned the use of Micron’s chips in critical infrastructure projects, which Beijing said posed “major network security risks” that could affect “national security”.