The problem with China's policy on retaliation is exemplified here. The West thinks China's rare earths restrictions are unprovoked when it should've happened earlier like when the US put sanction on semiconductors being sold to China.
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This is what Chinese don't get about Westerners where if you don't "retaliate" in kind immediately, the status quo to them become the norm and if you try to change it later, you're the criminal.
I think the mentality is the "poker" game mentality like Jeffrey Sachs said. The US thinks it has won the round when there is no immediate reaction or retaliation. Then later when there is a reaction, they are shocked and act the victim because to them it seems like China is starting a new round, when actually the old never really finished.