It’s a new era in economic warfare.
Beijing’s Cyberspace Administration recently instructed its technology giants to halt purchases of NVIDIA’s RTX Pro 6000D processors. Days earlier, China’s antimonopoly regulator declared that the American chipmaker had violated the country’s antitrust laws — a finding that emerged on the same day Chinese and American negotiators met in Madrid to discuss mounting trade tensions.
These coordinated regulatory actions represent more than narrow policy adjustments. They signal China’s adoption of new forms of technological statecraft: the strategic deployment of import controls, antitrust enforcement, and regulatory oversight. Where America has long wielded export controls to prevent adversaries from getting its technology, China is demonstrating that market access — and its strategic withdrawal — can be equally effective.
The antitrust allegations against NVIDIA center on the company’s 2020 acquisition of Mellanox Technologies, an Israeli networking equipment firm. Beijing had previously approved the transactions. Chinese regulators now claim the acquisition violated commitments. The timing, four years after the fact, coinciding with broader trade discussions, illustrates how China calibrates regulatory enforcement to geopolitical considerations.
Each side is escalating. Over the past few weeks, Washington has added 23 Chinese firms to its export restriction list. China launched its own investigation into American integrated circuit suppliers: an anti-dumping probe targeting analog chips, and an anti-discrimination inquiry on US restrictions on Chinese semiconductors.
Rather than relying on traditional trade mechanisms, China is leveraging its comprehensive regulatory apparatus. Antitrust investigations can extend for years, creating sustained uncertainty for foreign enterprises. Import restrictions can be justified on security grounds that are difficult to challenge. Most significantly, regulators can guide domestic companies toward preferred suppliers without explicit prohibitions.
This approach offers multiple strategic advantages: it places compliance obligations on foreign firms, creates grounds for market influence, and demonstrates state capacity to support domestic champions. Luo Wen, head of China’s antimonopoly regulator, says China will shape global antitrust norms and increase oversight of foreign tech acquisitions. This represents a fundamental shift from China as policy-taker to policymaker.
For American chipmakers, the implications are substantial. China’s AI market is the second-largest computing market in the world — estimated to be worth $46.53 billion annually. In comparison, the US AI market is estimated to be worth $73.98 billion.
US export controls have already reduced NVIDIA’s Chinese market share from 95% to 50%. China has historically accounted for roughly 20% of the firm’s revenue. The company reported no H20 chip sales to China in its most recent quarter, and China’s purchase directive ensures this trend will continue.
Beijing’s confidence reflects its assessment that domestic alternatives now provide comparable performance to American offerings. Chinese chip company Cambricon recently reported a remarkable 4,300% revenue increase as American competitors faced market limitations. Whether Chinese chips are indeed competitive with American ones remains up for debate.
China’s regulatory approach illustrates how economic interdependence has become a source of policy leverage. Companies that previously viewed China as an essential market must now navigate regulatory considerations. Global demand for AI chips positions American chipmakers as the world’s most valuable companies, but this prominence makes them a focal point in great power competition for AI leadership. The semiconductor industry, once a symbol of beneficial globalization, is fragmenting into competing technological blocs, where firms must increasingly choose sides rather than serve all markets.
For American policymakers, the lesson is sobering. Export controls may deny adversaries access to cutting-edge technology, but they also accelerate the development of competing ecosystems while providing justification for regulatory retaliation.
This represents a fundamental evolution in economic statecraft. Where export controls require determining what constitutes advanced technology and which entities should be denied access, import controls and regulatory scrutiny can be applied selectively based on strategic convenience.
The approach offers plausible deniability. Antitrust violations can be presented as regulatory enforcement rather than political retaliation. Security concerns about chip backdoors, whatever their veracity, provide cover for market exclusion. The cumulative effect is substantial, though each individual action appears defensible.
Both China and the United States now face a choice between escalation and accommodation. China could extend its regulatory assault to other American technology companies, while Washington could tighten export controls. Alternatively, both sides could step back and negotiate technology-sharing arrangements.
The era of export controls as the dominant paradigm may be ending. Welcome to the era of import controls.
Elly Rostoum is a Resident Fellow with the Center for European Policy Analysis (CEPA).
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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