But it still increases the cost of those rare earth input for the target companies. And such targeted sanctions could be combined with temporary seizures of their assets within China and HK, as well as targeting of associated personnel and companies. China can try to copy all the secondary sanction and foreign direct production rules Washington uses. For example, Beijing’s ultimately goal is to get Nexperia and the Dutch Government to backdown. However, Beijing could target all known companies and individuals that sell critical minerals and intermediate parts to Nexperia that scatter across the world. It could not only sanction the target companies and individuals but also demand that any companies that does business in China must cut off all contacts with these sanctioned individuals/groups or else have their assets in China frozen and personnel arrested (Meng Wanzhou playbook).
When push comes to shove, China can make most of its stuffs with exception of commercial aircrafts and top semiconductors (and lithography machines). China is keeping so many foreigners happily earning their bucks in the Chinese market because it still seeks to artificially preserve the WTO and hope other countries would one day revive the free trade bloc (which in turn benefits China’s manufacturers). But if the goal of western nations were to prevent Chinese manufacturers from gaining their rightful place through tariffs and other trade embargoes, then Beijing might as well adopt the MAGA playbook and with a dose of Russian imperialism.
China’s so called “peaceful rise” is a naive and immature concept constructed by a generation of arrogant pro-west and arguably self-loathing Chinese elites. Those Chinese elites, including Party leaders and government researchers, never foresaw that there indeed exists a global bamboo ceiling (keeping China permanently at the lower ends of global supply chain) imposed by G7 countries, which came crashing down during the first Trump Administration and caught the entire SeeSeePee peeing with its pants down. It was arguably China’s Pearl Harbour moment.
Many Chinese liberals and urban cosmopolitan elites would start argue that had China not pursued MIC 2025 industrial policy and happily stayed at the lower ends of global industrial supply chain, the West would never turn against China. But the problem with this assumption is that China’s wages would never rise, and that Chinese migrant workers would happily work 996 forever. Moreover, even without the one child policy, with so many migrant workers leaving their hometowns to engage in 996 sweatshop, China’s birthrate would still collapse at some point naturally. China would then get old without even becoming a middle income country. Once it gets old amid rising wages without even bits of tech self sufficiency, China would simply become a bigger version of Thailand and Philippines (deindustrialised and population heavily hooked to drugs, crime, sex, corruption, and tourism). Heaven for white westerners but hell for its own countrymen. MIC 2025 industrial policy’s most important goal is therefore to have China become self sufficient in technologies critical to long term competitiveness and national security BEFORE China gets old (think 2035, when the 1980s baby boomers retire). China therefore really has only one shot to become a tech superpower, and the 15th and 16th Five Years Plans would be the most critical.