Semiconductor Geopolitics and Strategic Competition: China’s Responses to the CHIPS and Science Act in the Global Political Economy
Abstract
The U.S. CHIPS and Science Act, enacted in 2022, represents a pivotal intervention in global semiconductor politics, designed to reshape the distribution of technological capabilities and constrain China's strategic trajectory. While existing studies have examined this rivalry primarily through the lenses of industrial policy or bilateral trade competition, few have analysed China's responses as deliberate attempts to contest structural power within the global political economy. This article addresses two questions: What are China's strategic responses to the CHIPS and Science Act, and what are the broader implications for the global political economy? Drawing on an integrated framework that synthesizes Robert Gilpin's International Political Economy approach and Susan Strange's concept of structural power, the study employs qualitative case study methodology. Gilpin explains why states treat semiconductor access as a matter of strategic priority, while Strange's four structures, namely security, production, finance, and knowledge, explain how power is exercised through the frameworks governing technological exchange and governance. Findings reveal that China has mobilized state-backed semiconductor funding, expanded research and development capacity, imposed critical mineral export restrictions, deepened BRICS partnerships, and extended the Digital Silk Road, accelerating supply chain disruption, technology standard fragmentation, and the formation of competing technological blocs. The article contributes to the literature by integrating Gilpin's concept of relative gains with Strange's notion of structural power to explain China's responses to the CHIPS and Science Act and their implications for the global political economy.
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Doshi, R. (2021). The long game: China’s grand strategy to displace American order. Oxford University Press.
Ebrahimi, A. (2023, September 28). “China Boosts Semiconductor Subsidies as US Tightens Restrictions.” The Diplomat. https://thediplomat.com/2023/09/china-boosts-semiconductor-subsidies-as-us-tightens-restrictions/
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Fuller, D. (2023, November 25). “How SMIC turned US sanctions into a China success story.” Taipe Times. https://www.taipeitimes.com/News/editorials/archives/2023/11/25/2003809671
Gereffi, G. (2020). What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies. Journal of International Business Policy, 3(3), 287–301. https://doi.org/10.1057/s42214-020-00062-w
Gilpin, R. G. (2011). Global political economy: Understanding the international economic order. Princeton University Press.
Grieger, G. (2020). EU-China Comprehensive Agreement on Investment. European Union: European Parliamentary Research Service.
Hufbauer, G. C., & Hogan, M. (2022). “CHIPS Act Will Spur US Production but Not Foreclose China.” Peterson Institute for International Economics. https://www.piie.com/publications/policy-briefs/2022/chips-act-will-spur-us-production-not-foreclose-china
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Lewin, A. Y. (2024). China Innovation Challenge: A Reprise. Management and Organization Review, 20(6), 958–962. https://doi.org/10.1017/mor.2024.44
Luo, Y., & Van Assche, A. (2023). The rise of techno-geopolitical uncertainty: Implications of the United States CHIPS and Science Act. Journal of International Business Studies, 54, 1423–1440. https://doi.org/10.1057/s41267-023-00620-3
Nanjing University. (2025). “National-Local Joint Engineering Research Center-Nanjing University.” https://www.nju.edu.cn/en/info/1063/4901.htm
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Odgaard, L. (2021). Europe in between US-Chinese strategic competition. In Europe in an Era of Growing Sino-American Competition (pp. 38–53). Routledge. https://doi.org/10.4324/9781003007746-4
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Strange, S. (2015). States and Markets. Bloomsbury Publishing.
Taidong, Z. (2022, March 8). "From “hardware” to “human-ware.” China Daily. https://www.chinadaily.com.cn/a/202203/08/WS62269f94a310cdd39bc8b0b9.html
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The Lowy Institute. (2024, December 31). "BRICS Pay as a challenge to SWIFT network." https://www.lowyinstitute.org/the-interpreter/brics-pay-challenge-swift-network
Varas, A., Varandarajan, R., Goodrich, J., & Yinug, F. (2020). Government Incentives and US Competitiveness in Semiconductor Manufacturing. Boston Consulting Group & The Semiconductor Industry Association. https://www.semiconductors.org/wp-content/uploads/2020/09/Government-Incentives-and-US-Competitiveness-in-Semiconductor-Manufacturing-Sep-2020.pdf
Yanik, T., & Yildirim, E. (2025, April 25). "China pushes global 5G expansion as tech rivalry with US deepens." Anadolu Agency. https://www.aa.com.tr/en/asia-pacific/china-pushes-global-5g-expansion-as-tech-rivalry-with-us-deepens/3548279
Zenglein, M. J., & Holzmann, A. (2019). Evolving Made in China 2025: China’s industrial policy in the quest for global tech leadership. Mercator Institute for China Studies. https://merics.org/sites/default/files/2020-04/MPOC_8_MadeinChina_2025_final_3.pdf
Zheng, W. (2024). "China’s Digital Silk Road (DSR) in Southeast Asia: Progress and Challenges." Fulcrum: Analysis on Southeast Asia. https://fulcrum.sg/chinas-digital-silk-road-dsr-in-southeast-asia-progress-and-challenges/
Published
2026-06-25
How to Cite
AMALIA, Ridha et al.
Semiconductor Geopolitics and Strategic Competition: China’s Responses to the CHIPS and Science Act in the Global Political Economy.
Insignia: Journal of International Relations, [S.l.], v. 13, n. 1, p. 53-71, june 2026.
ISSN 2597-9868.
Available at: <https://jos.unsoed.ac.id/index.php/insignia/article/view/18847>. Date accessed: 13 aug. 2026.
doi: https://doi.org/10.20884/1.ins.2026.13.1.18847.
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Articles
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