BEIJING—Amid escalating tensions, China’s technology ministry is playing down China’s semiconductor ambitions and contending that U.S. concerns over the issue are overblown.

Chinese officials have been alarmed at the U.S. backlash toward its efforts to advance its chip sector, especially since many of China’s programs are still on the drawing board, said Peng Hongbing, vice director of information technology at China’s Ministry of Industry and Information Technology.

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