US Tightens Overseas Loopholes Targeting Chinese Entities
The US Department of Commerce has issued new guidance to close a major loophole exploited by Chinese companies seeking advanced NVIDIA artificial intelligence chips through overseas subsidiaries. According to Reuters reporting on June 1, the updated rules extend export license requirements for advanced chips to Chinese-headquartered entities, even when operations are conducted outside mainland China.
The Bureau of Industry and Security (BIS) guidance, released on May 31, specifically addresses attempts by Chinese firms to acquire NVIDIA's Blackwell and other high-end AI chips via subsidiaries in Malaysia and other third countries.
H200 Approval vs. Reality: Political Face-Saving in Beijing
Although former President Trump approved NVIDIA sales of H200 chips to China, deliveries remain heavily restricted. Insiders within the Chinese system told The Epoch Times that Beijing has not approved purchases or imports of the H200 despite the US green light.
A well-placed source close to the Chinese Ministry of Commerce, using the pseudonym Zhong Nan, revealed the true motive: "The CCP is obsessed with saving face. They publicly say they don't need it, but more than 20 companies have already applied to buy the chips. Earlier H100 and A100 chips were in extremely high demand."
Smuggling Networks Still Active for High-End Chips
Zhong Nan disclosed that circumvention continues through overseas channels: "It is still possible to bypass controls and obtain H200 chips, and even more advanced ones, though in limited quantities. The smuggled high-end chips are primarily supplied to Chinese state-designated tech firms for AI research and development."
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