China bypasses US chip restrictions via state-backed financing and smuggling

Chinese entities are utilizing complex financing and smuggling networks to acquire restricted Nvidia AI chips, bypassing United States export controls.

Semi-Tech Leasing Group Co., a lender largely controlled by municipal governments in Shenzhen and Beijing and tied to China’s national semiconductor fund, reportedly financed the purchase of over 700 servers for Glory View Technology Co. These servers include Nvidia’s Blackwell-series B300 chips, which are subject to US export restrictions. The transaction was facilitated through sale-and-leaseback arrangements totaling approximately $450 million.

Beyond formal financing, a vast black market has emerged to supply China with high-end hardware. Smuggling operations utilize logistical triangulation through countries such as Indonesia, Japan, and Hong Kong to mask the final destination. These networks employ shell companies, falsified shipping labels, and physical hardware alterations to evade regulatory scrutiny. Investigations suggest some operations involve complicity from employees within technology firms and distributors to facilitate the movement of large-scale hardware shipments.