The US wants to further restrict exports of advanced chips and machinery to China from October, the news agency reported. Reuters. The Americans want to prevent China from modernizing its military with American technology.

Under the scheme, high-tech companies will now have to apply for an export license to export certain products to China. It refers to products such as processors, chips or machines that can make chips.

The US also wants to prevent manufacturers from making their chips in China. That’s why the US government is coming up with multi-billion dollar subsidies for high-tech companies to make their products in America.

The subsidy program is linked to the so-called CHIPS Act. Companies using the subsidy program will not be allowed to build high-tech factories in China for the next ten years because of the law.

The move would make it harder for China to access American technology. The US fears that the Asian country will use the technology to modernize its military.

Currently, export restrictions are already in place for a small number of US companies. The new rules apply to much of the US technology and chip industry.

The U.S. is also currently operating a blacklist of Chinese companies that U.S. companies are not allowed to do business with. Huawei is one of the most popular concerns on this list.