The Unstoppable Engine: Why America Can’t Catch China’s Tech Juggernaut

Perhaps the most remarkable aspect of China’s technological ascent is that it is occurring despite sustained efforts by the United States and its allies to constrain it. Since October 2022, the Biden administration has imposed increasingly stringent export controls on semiconductor equipment and technology flowing to China. These measures have included restrictions on advanced chip manufacturing equipment, blacklisting of Chinese entities, and pressure on allies like the Netherlands and Japan to limit their own technology exports to China [8].

The semiconductor sector, often called the “oil of the 21st century,” has been the primary battleground. The US has revoked special export licenses for Taiwan Semiconductor Manufacturing Company (TSMC) to supply its Chinese facilities and has imposed sweeping restrictions on AI chip exports [9]. In January 2025, the administration announced new controls on advanced computing chips and cloud access, further tightening the technological noose around Chinese companies.

Yet China’s response has been nothing short of remarkable. Despite being cut off from the most advanced extreme ultraviolet (EUV) lithography machines essential for cutting-edge chip production, China’s leading foundry, Semiconductor Manufacturing International Corporation (SMIC), achieved 7nm chip production by mid-2022 [10]. The company accomplished this feat using older deep ultraviolet (DUV) technology with multiple patterning techniques—a more expensive and less efficient approach, but one that demonstrates remarkable engineering ingenuity under constraint.

The financial results speak volumes about China’s resilience. SMIC reported record revenue of $2.17 billion in the third quarter of 2024, representing a 34% year-on-year increase despite ongoing sanctions [11]. Meanwhile, China’s semiconductor equipment self-sufficiency rate reached 13.6% in 2024, with projections suggesting it could hit 50% by 2025 [12]. These figures represent not just statistical progress but a fundamental shift toward technological independence.

Huawei, perhaps the most sanctioned Chinese technology company, exemplifies this resilience. Despite being effectively cut off from global supply chains, the company has continued developing advanced AI processors and is estimated to be capable of producing approximately 750,000 advanced AI chips annually [13]. The company has also developed innovative workarounds for high-bandwidth memory dependencies, further reducing its reliance on Western suppliers.

This progress under pressure reveals a crucial truth: sanctions may slow China’s technological development, but they are also accelerating its drive toward self-sufficiency. Every restriction imposed by the West becomes a problem for Chinese engineers to solve, and increasingly, they are finding solutions. The result is a more resilient, more independent Chinese technology ecosystem that may ultimately prove more formidable than if it had remained integrated with Western supply chains.