China’s latest export controls, technology security reviews and certification restrictions offer one of the clearest indications yet that strategic competition between the world’s two largest economies is reshaping not only bilateral trade relations, but also the principles underpinning the global economy.
China this week tightened export controls on selected dual-use technologies, introduced new national security reviews covering imported software, imposed restrictions affecting US-linked certification activities and sanctioned several American entities in response to Washington’s latest technology restrictions. The measures, announced weeks before President Xi Jinping’s expected visit to Washington, represent one of Beijing’s most comprehensive regulatory responses since the United States expanded controls on Chinese technology companies and strategic supply chains.
Taken individually, the measures affect a relatively limited number of sectors. Taken together, however, they signal something far more significant: China is increasingly deploying a legal and regulatory framework built over several years to respond to external economic pressure through targeted administrative measures rather than broad tariff escalation.
The immediate commercial impact may prove limited. Their longer-term significance lies in demonstrating how strategic competition between the United States and China is increasingly being conducted through regulation, technology governance and industrial policy rather than traditional trade barriers.
That evolution extends well beyond the bilateral relationship.
For more than three decades after the Cold War, the international economy was organised around a relatively consistent assumption: deeper trade integration, cross-border investment and increasingly global supply chains would maximise efficiency, stimulate growth and reinforce geopolitical stability. That framework transformed international commerce and underpinned one of the most integrated periods in modern economic history.
Today, those principles are being fundamentally redefined.
Rather than retreating from globalisation, governments are increasingly redesigning it around economic security. Export controls, investment screening, industrial policy, technology governance and supply-chain resilience are no longer exceptional responses to geopolitical crises. They are becoming enduring instruments of economic policy as governments seek to balance market openness with national resilience across strategically important sectors.
Globalisation is being redesigned
The transformation extends far beyond China and the United States.
The first phase of modern globalisation prioritised efficiency, comparative advantage and increasingly international production networks. More recent disruptions—including the pandemic, semiconductor shortages, geopolitical conflicts and intensifying technological competition—have exposed the vulnerabilities created by highly concentrated supply chains.
The response has not been deglobalisation. Instead, governments are increasingly pursuing de-risking: preserving the benefits of international commerce while reducing dependence on strategically sensitive technologies, critical minerals, advanced manufacturing and essential infrastructure. Businesses have responded by accelerating friend-shoring, near-shoring and China+1 strategies, diversifying production while remaining globally integrated.
The result is an evolving model in which efficiency remains essential but increasingly shares priority with resilience, strategic autonomy and national security.
A new consensus on economic security
Although China provides one of the clearest illustrations of this transition, the underlying shift is becoming increasingly visible across the world’s largest economies.
The United States has expanded export controls on advanced semiconductors, strengthened outbound investment screening and tightened restrictions on sensitive technologies. The European Union has introduced its Economic Security Strategy to reduce strategic dependencies while maintaining open markets. Japan, South Korea, India and several other economies have likewise strengthened industrial policies supporting domestic manufacturing, resilient supply chains and critical technologies.
Despite differing political systems and economic priorities, these approaches increasingly converge around a common objective: reducing strategic vulnerabilities without abandoning the benefits of international trade.
Governments are also assuming a more active role in shaping competitive outcomes through industrial policy, strategic subsidies, export controls and regulatory oversight. While the World Trade Organization continues to underpin much of global commerce, major economies are increasingly supplementing multilateral trade disciplines with domestic economic security frameworks designed to safeguard strategically important industries and critical technologies.
Regulation becomes strategic infrastructure
China’s latest measures illustrate how strategic competition is increasingly being conducted through regulatory systems rather than tariffs alone.
Export licensing, technology security reviews, certification standards, investment screening and technical regulations are becoming core instruments of economic statecraft. The importance of Beijing’s latest measures lies less in their immediate commercial effect than in demonstrating how regulatory governance is becoming a central arena of geopolitical competition.
For multinational companies, this represents a structural rather than cyclical adjustment. Competitive advantage increasingly depends not only on innovation and operational efficiency but also on the ability to navigate multiple regulatory systems, anticipate geopolitical risk and build resilient supply chains.
The implications extend equally to capital markets. Cross-border investment, mergers and acquisitions, technology partnerships and long-term capital allocation are increasingly influenced by economic security considerations alongside traditional commercial metrics.
Outlook
China’s latest measures should therefore be understood not simply as another episode in the continuing US-China technology dispute, but as one of the clearest manifestations of a broader transformation already reshaping the international economy.
The defining question for the coming decade is no longer whether globalisation will continue, but how it will be governed. The emerging system is unlikely to resemble either the highly liberalised model that characterised the early twenty-first century or a fully fragmented world divided into competing economic blocs. Instead, it is evolving towards a framework in which governments continue to support international commerce while exercising greater influence over strategic technologies, investment, industrial capacity and critical supply chains.
Whether this transition ultimately strengthens resilience without undermining productivity and long-term growth will depend on how effectively major economies balance legitimate national security concerns with continued economic openness. What appears increasingly evident, however, is that the next era of globalisation will be defined less by the retreat of international integration than by its governance through increasingly sophisticated national regulatory systems.
China’s latest measures provide one of the clearest illustrations of that transformation, but they are not its sole driver. Rather, they reflect a broader reordering of the global economy already under way—one in which economic security, technological leadership and regulatory sovereignty are becoming enduring pillars of international economic policy.
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