Economics: The Law Of Unintended Consequences: When Will China Start Her Manhattan Project For Chips?

 (Drivebycuriosity) - US President Biden declared war to China, at least an economic war. He stopped the exports of advanced American computer chips and blocked the chip exports from Taiwan as well ( wired ). Bad for Baidu, Alibaba, Tencent and the complete Chinese technology sector. All these companies depend on advanced semiconductors from Nvidia, Intel and other US & Taiwanese producers. Biden threw a wrench into China´s economy & progress.

The situation reminds of Germany in WWI. Then the country was cut of from global commodity supplies, including oil. Germany was forced to develop quickly alternative sources. Therefore Germany refined coal, which the country has in abundance, into gasoline, called Leuna Benzin ( wikipedia). Other foreign materials, like rubber, were produced synthetically as well. 

I guess dictator Xi Jinpin is smart enough to see the danger for his economy. I suppose he will try to compensate the choked chip supply as soon as possible. He might get inspirations from America´s Manhattan Project, a high-speed research and development undertaking during World War II that produced the first nuclear weapons. ( wikipedia). From 1942 to 1946 the US government concentrated lots of elite scientists, engineers and immense amounts of material & money to create the nukes as fast as possible. In 2020 happened a similar undertaken: Operation Warp Speed, a federal effort to speed up the development of COVID-19 vaccines ( gao.gov ).

I wouldn`t be surprised if China starts a kind of Manhattan Project - or Operation Warp Speed - to create advanced Chinese chips and replace foreign chips as soon as possible. That would need concentrating massive resources - human capital & money - for just one task as the Manhattan Project once did.

China has a lot of human capital, masses of ambitious & well educated people. It is a huge country with more than 3,000 colleges and universities ( wikipedia). The country can concentrate a vast number of physicists, mathematicians, engineers and administrators for the chip project - multiple times more than the relatively small US once did.  

I couldn `t be too difficult to reengineer advanced American & Taiwanese chips. Patent rights? Biden himself declared patent rights for irrelevant (pharmacy, vaccines  nature). It is a (hopefully still cold) war anyway.

Maybe Biden kick-started another leap of China´s rise. The law of unintended consequences.