A reposting from
Jan 10 2025
PREAMBLE
Editor’s Note:
This is Part II of our exclusive interview with Professor Jin Keyu from the London school of Economics, author of The New China Playbook. In this part, She highlights how U.S. sanctions gave China the long-overdue push it needed for technological independence, which the country had been scared to pursue earlier.
The China Academy: Former Google CEO Eric Schmidt has said that "In our lifetimes, a battle between the US and China for knowledge supremacy is going to be the big fight." You once mentioned that for the first time in history, China, as a developing country, is creating cutting-edge technology despite the US technology blockade. How much progress has China made in catching up with the US in advanced technologies, like AI and chips?
Keyu Jin: Again, there are unintended consequences and reactions to every action put forth. I'm not sure if, historically, sanctions, restrictions, export controls, or any kind of barriers to another country’s progress have ever worked. In fact, most of the time they backfire. Look at the Spanish blockade of Portugal in the 16th century. Portugal ended up building an entire navy force—thanks to the blockade. There are so many other historical episodes where cutting off resources turned a goal into a national program. These efforts tend to accelerate progress.
We’re seeing some of that in China. For sure, there has been a massive reaction to the technological restrictions. Take semiconductors, for example. China used to comfortably import them, as much in value as it did oil. Now, all of that demand is being redirected to domestic companies, which are seeing more profitability, greater capability, and more scope to invest in research and development. This is really pushing them—forcing them—to accomplish something they didn’t need to achieve before.
There are so many other examples that follow a similar pattern. Unlike trade and investment, where there is often scope for back-and-forth, tit-for-tat negotiations and normalization to a certain extent, technological developments are happening in parallel ways.
But if you look at China, it’s not just the US that it can work with. It has a huge market in developing countries, and it is actively selling to Europe.
Especially with Trump’s potential presidency and the possibility of weakening US ties with its allies in Europe, there is an opportunity for China to strengthen, reinforce, and create new relationships. That’s one thing the US-China trade war has accomplished: a new trading system and a new globalization network. And this network is not static—it’s dynamic. When one channel, like US-China trade, is shut off, other pieces are reshuffled and realigned.
We’re seeing many countries around the world, against the backdrop of US-China competition, signing new trade agreements, building new trade partnerships, and reinforcing regional trade ties.
China is doing the same. There’s a reshuffling and dynamic optimization, if you will, of trading, financial, and technological networks. Because in the end, it is no longer just the US and China in this world—it’s truly a global economy.
But most importantly, the internal drive in China has never been higher. You have an entire nation pushing for cutting-edge technology. This effort comes from the top-down, with central government initiatives, but also from the bottom-up, with local governments working alongside private sectors and entrepreneurs. The private entrepreneurs, who are the driving force of innovation, are being given more opportunities and are being forced to achieve more.
Now, do I think that overall this is a good thing for the US in the long run? Absolutely not. The world is much better when technology can, to some extent, be shared for the advancement of the entire global economy.
But in this context, you can’t simply stop a rapidly developing, large nation with a vast number of engineers, hardworking people, and significant market access. It’s not possible to stall it. In fact, such actions may spur them to achieve even more.