The Trap in China's Push for Technological Self-Reliance

Everyone already knew the outline of the US-China trade war and technology sanctions that began in 2019, so I will not repeat it.

I want to look at the problem from another angle. What happens if China achieves full "self-reliance and control"?

Few people notice that no country can command every industry across an entire supply chain. The gaps are part of a mutual pledge. Through incomplete national supply chains and the WTO system, countries depend on one another and constrain one another. Nobody can simply walk away. Apart from nuclear weapons, this interdependence is a real source of ballast for peace.

Then the United States weaponised the supply of technology in 2019. Administrative orders and legislation directly interrupted technology trade. That opened Pandora's box. The American intention was probably to force China back into the low-end manufacturing role and make it abandon its larger ambitions.

China clearly refused. It took the road of "self-reliance and control." The decoupling that followed was the natural result of choices made by both sides.

Suppose Chinese technology keeps advancing and the country eventually localises the whole industrial chain. Whether it can do so is a separate question. What would happen then?

Made in China could be rejected by part of the world, perhaps most of it. There would be no external restraint on the system. It could be weaponised at will, while the products themselves would become black boxes to users, especially ICT products. Who would willingly buy and use them? At that point, a price advantage would mean very little. That is the main trap in China's version of technological self-reliance.

The idea that Belt and Road could supply an alternative market and gradually form a Soviet-style bloc is basically impossible. The countries along Belt and Road have wildly different ideologies, many of them with little in common with China's. Its two real selling points are cheap loans, often loans that will never be repaid, and low product prices. If the risks above become real, both attractions disappear.

Can China achieve this kind of self-reliance? The answer depends first on time and second on scope. With China's present suppression of the intellectual class, a condition I could also see continuing into the foreseeable future, genuine technological innovation would not be possible. What remained possible was technological imitation. Without a major technological revolution, China might build a self-reliant system one or two generations behind the frontier. Such a system would not necessarily appeal to markets outside China, either economically or technologically.

Why keep doing it, then? Answer omitted.

Note: this essay does not account for alien influence.