The US has long complained about China's industrial policy. The irony is that the US sanctions have become a much more effective semiconductor industrial policy ..... for China. Chinese government has announced and implemented a series of policies and regulations to promote and develop semiconductor industry since 2000. The direct results were lackluster; much of China's progress in the industry since then have been accomplished by the market and private companies (Huawei, SMIC, etc.). One of the biggest reasons is that Chinese companies preferred to work with more established international companies, for good reasons. Again, Huawei and SMIC were quite representative here.
The US sanctions are now existential threat to Chinese companies in the semiconductor industry and the broader IT industry, forcing them to work with each other. To be sure, there are and will be short-term setbacks, delays and cancellations, but if you are a long-term observer of Chinese tech industry like me, you know that China will always come through and achieve higher than if there were no sanctions in the longer-term. This is no copium, but backed by numerous precedence. In fact, I would argue that China is probably the only country in the world that can accomplish such and develop and sustain an independent and advanced semiconductor industry. Some argue that Japan currently has the most self-sufficient semiconductor industry. But Japan misses one critical ingredient: market.
