China Is CUTTING OFF Global CASH To U.S. Chip Giants – Financial Panic Has Started

The US has historically used interest rates to exert economic influence, but its current debt-to-GDP ratio and high interest payments make further rate hikes impossible. This has led to a weakening dollar and a decreased ability to attract foreign investment, especially into critical sectors like AI and chips.

China is actively working to deny US chip giants revenue and attract global capital to its own tech industry. Chinese chip companies are increasingly listing on stock exchanges, drawing in significant investment and fueling R&D. These companies are pushing advancements, like More Threads' new chips that offer increased computational density and energy efficiency.

The Chinese government recently announced a $70 billion fund for its semiconductor industry, aimed at reducing reliance on US chips. China is issuing ultra long bonds to secure long-term, low-cost funding for its AI and chip sectors, effectively locking away global capital from the US for decades.

While the US faces persistent inflation with money printing, China is able to increase its M1 money supply without significant inflation because the money is channeled into production and industrial advancement rather than consumption. This allows China's industries, particularly AI and semiconductors, to grow rapidly.

China is making rapid advancements, including the development of an EUV machine for chip manufacturing, rivaling Western technology. This breakthrough, driven by former ASML engineers and massive government funding, is expected to lead to a flood of affordable chips from China by 2028. China is heavily subsidizing PhD researchers in the chip sector with uncapped salaries and generous grants to attract global talent.

The US and China are in a global subsidy race, with China currently in the lead due to the US's debt situation. China's goal is to build an entire semiconductor stack and export its chips and AI solutions globally. Projections indicate a significant workforce gap in high technology in the US by 2030, which China aims to capitalize on through heavily subsidized education in technology.