Trump Slaps Xi In The Face One More Time, Goes After China’s Super-Computing Capabilities

In yet another example of what can only be described as a ridiculously schizophrenic approach to dealing with China, the Trump administration on Friday decided to blacklist four more Chinese firms and one research institute, all of which will join Huawei on Wilbur Ross’s “entity list”.

This comes on the same day that Trump appeared to offer something of an olive branch to Beijing by indefinitely postponing Mike Pence’s planned human rights speech.

Sugon (a maker of supercomputers) and Jiangnan Institute of Computing Technology “are involved in activities determined to be contrary to the national security and foreign policy interests of the United States”, the Commerce Department said Friday.

A trio of Sugon subsidiaries including Higon, were targeted in the action as well. That’s no fun for AMD, which, through its Chinese joint venture THATIC, licenses technology to Higon and sells chips to Sugon.

“Sugon has publicly acknowledged a variety of military end uses and end users of its high-performance computers”, Commerce said in the notice. As for the Wuxi Jiangnan Institute of Computing Technology, it’s “owned by the 56th Research Institute of the General Staff of China’s People’s Liberation Army [and] its mission is to support China’s military modernization.”

Commerce added China’s National University of Defense and Technology to the entity list years ago in order to keep it from procuring Intel chips to power supercomputers used to “support nuclear explosive simulation and military simulation activities.” The notice says that since NUDT was added to the list in 2015, it’s “procured items under the name Hunan Guofang Kei University using four separate, additional addresses not already listed on the Entity List.”

Just like the Huawei blacklisting, US companies will now have to obtain a license from the government to do any business with the affected entities. Those license requests will almost invariably be denied.

Sugon captured the lion’s share of the Chinese supercomputer market for seven years running from 2009 through 2016.

If you’re wondering whether this is a big deal, the answer would appear to be “yes”.

“Sugon’s machines serve China’s government and its largest technology companies, powering everything from military simulations to weather prediction”, the New York Times notes, adding that “in most cases, the computers rely on a mix of microchips from the American manufacturers Intel and Nvidia [and] by placing Sugon on the list, the Trump administration is effectively cutting it off from the tiny brains it needs to make the billions of calculations required to model weather patterns and support video apps and online shopping.”

Trump will now impede China’s ability to predict the weather, apparently.

And it gets better – or worse, depending on how you want to look at it. As the Times goes on to write, “Sugon supercomputers support State Grid, the monopoly that runs China’s electric grid; China Mobile, the country’s largest telecom services provider; and the China Meteorological Administration.”

You’ve got to hand it to Trump, rather than sabotage other nations’ power grids and meteorological capabilities with clandestine cyber attacks, he just cuts them off from the technology they need to supply electricity and model weather patterns. Maybe this is why the president was so angry when The New York Times reported that the US is stepping up cyber attacks on Russia’s power grid. Something like this: “That’s fake news! If I wanted to sabotage Russia’s power grid, I’d just have Wilbur Ross come right out and say it!”

Jokes aside, this is a bid to dent China’s supercomputer ambitions, something that’s detailed extensively in the linked Times article above. Commerce captures the gist of it in this passage:

Sugon, the Wuxi Jiangnan Institute of Computing Technology, and the National University of Defense Technology (NUDT) are the three entities leading China’s development of exascale high performance computing.

Anyway, the timing is obviously bad, coming just days ahead of Trump’s meeting with Xi at the G20, although it’s possible the administration thought they could offset any bad vibes by delaying Pence’s human rights speech on the same day.

Meanwhile, in a testament to just how off the rails this situation really is, Huawei on Friday sued the Commerce Department, The Bureau of Industry and Security and the Office of Export Enforcement in federal court. The case is Huawei v. U.S. Department of Commerce, 19-cv-1828, U.S. District Court, District of Columbia (Washington).

Full notice from Commerce