In brief: While the US has further tightened restrictions on chip-related exports to China recently, there are some entities in the country that have been on an export blacklist for decades. One of these is China's top nuclear-weapons research institute, but that hasn't stopped it from regularly buying Intel and Nvidia hardware.
The state-run China Academy of Engineering Physics (CAEP) was one of the first to be placed on a US export blacklist in 1997 because of its work in the field of nuclear weapons, preventing it from purchasing American technology. However, according to a Wall Street Journal report, the institute has obtained US hardware at least a dozen times since 2020, including Intel's Xeon Gold processors and Nvidia's GeForce RTX graphics cards, for use in academy computers.
Intel and Nvidia cannot sell their products directly to the CAEP; instead, the institute bought them from Chinese marketplaces such as Taobao, Aliexpress, and other resellers. A WSJ review of CAEP-published research papers found at least 34 over the last decade referenced using American semiconductors in its research. The laboratory studies computational fluid dynamics, a broad scientific field that includes modeling nuclear explosions; physicists at CAEP helped develop the country's first hydrogen bomb.
The revelation illustrates the difficulty in enforcing US export restrictions on China. Nvidia said the millions of PCs sold worldwide means it cannot control where its products end up. Intel said it complies with export regulations and sanctions and so must its distributors and customers.
"It is insanely difficult to enforce the U.S. restrictions when it comes to transactions overseas," former top Commerce Department official Kevin Wolf told the WSJ.
The Department of Defense said China has been accelerating its nuclear weapons development in recent years. The People's Liberation Army currently has more than 400 warheads, a figure that could reach about 1,500 by 2035 if the current rate of expansion continues.
With the export restrictions in place, China has been trying to create its own chips, a plan the US is trying to scupper by prohibiting the sale of advanced chipmaking tools to the Asian nation. The Biden administration recently came to an agreement with the Netherlands and Japan that will see the two countries impose their own export controls on chipmaking equipment to China.
