In many people's opinion, this would be called a smart diversion of resources to more productive forces. If something turns out to be a money printer elsewhere China can simply copy the idea domestically and beat the other company to global expansion.
This is about private equity. What are you diverting and where?
The US is 90% of the world? what?
US + EU + Japan and SK is like 30-35% of China's exports destination. But downstream wise, large portion of exports to Vietnam ultimately head to a US/EU, same with Hong Kong and other ASEAN countries.
But trade will never go down to zero. The big deal is that many of the advanced and high value products will want to be exported towards high value markets. The threat of bans and trade wars creates uncertainty and friction. Smart (private) money will want to wait until this trade uncertainty is over before investing.
I'm not dooming and glooming, but when assessing China's strengths and weaknesses, this limitation on China's private equity is
not a good thing. China would be even better off if had more private equity investment. This is an unfortunate casualty of the US trade war, but the Chinese gov. should do more to address this. It also feeds into private spending and consumption as well. All of these things are ultimaetly interconnected.
