WASHINGTON D.C.: A report released this week showed that despite Washington's new export restrictions to curb advances in China's semiconductor industry, Chinese companies are still buying U.S. chipmaking equipment to make advanced semiconductors.

The 741-page annual report, released by the U.S.-China Economic and Security Review Commission, criticized the Biden administration's restrictions, announced in October 2022, which aim to prevent Chinese chipmakers from accessing U.S. chipmaking tools used to manufacture advanced chips at the 14 nanometer node or below.

The report stressed, "importers are often able to purchase the equipment if they claim it is being used on an older production line, and with limited capacity for end-use inspections, it is difficult to verify the equipment is not being used to produce more advanced chips."

The finding comes as despite the export restrictions announced last year against China's leading chipmaker SMIC, Chinese telecoms giant Huawei produced an advanced 7 nanometer chip to power its Mate 60 Pro smartphone.

Huawei and SMIC were also added to a trade restriction list in 2019 and 2020, which forbids U.S. suppliers from sending certain technology to the companies.

According to China watchers, SMIC could have produced the chip advanced with equipment obtained before the restrictions were announced in October 2022.

U.S. allies Japan and the Netherlands, which also have advanced chipmaking equipment industries, announced their own restrictions on chip exports to China.

However, the report said that China stockpiled equipment during the time gap between the U.S. October 2022 restrictions and Japan's and the Netherlands' similar moves in July and September 2023, respectively.