Since 2016, the United States has imposed thousands of sanctions against China, targeting over 70 of its most advanced tech companies, entire regions like Xinjiang, and hundreds of Chinese officials. The goal was clear: to stop China's rise, particularly in areas like military expansion and technological advancement. However, the sanctions have not had the intended effect. China not only survived but thrived, especially in the tech sector, where it now dominates in artificial intelligence (AI) patents.

The Rise of Huawei

Huawei, one of China’s most prominent tech companies, serves as a prime example of resilience. Founded by Ren Zhengfei in 1987, Huawei grew into a global telecom giant by 2010. However, in 2018, the U.S. government sanctioned Huawei, leading to a significant decline in its revenues and profits. Despite these setbacks, Huawei managed a dramatic comeback by shifting its focus to the domestic market and diversifying into new industries like 5G networks, coal mining, and electric vehicles.

Strategy 1: Serving China First

China’s first strategy in overcoming U.S. sanctions was to pivot from global exports to domestic consumption. Huawei exemplified this by increasing its revenues within China, now accounting for 70% of its total revenue. The company also expanded into various new industries, helping it to stabilize and grow despite the international pressures.

Strategy 2: Increase Patriotism

Huawei capitalized on U.S. sanctions to position itself as a national champion in China. The company’s branding as a defender of Chinese interests resonated deeply with the Chinese public. This surge in nationalistic support helped Huawei recover and expand, making it even more popular among Chinese consumers.

Strategy 3: Government Support

The Chinese government played a crucial role in supporting key industries and companies, including Huawei, through subsidies, tax credits, and contracts. This strategy was not limited to tech but extended to other sectors like electric vehicles (EVs). The government’s backing was instrumental in enabling Chinese companies to innovate and compete on the global stage.

Case Study: The Rise of Chinese EVs

The Chinese EV industry, supported by government initiatives, has seen remarkable growth, overtaking foreign brands in the Chinese market. For the first time, more than half of the passenger vehicles sold in China were new energy vehicles, marking a significant shift from traditional fuel vehicles.

The Future of U.S.-China Relations

As the U.S. and China continue to impose sanctions and trade restrictions on each other, both nations are likely to increase government support for their respective industries. This ongoing economic and technological rivalry will shape the future of U.S.-China relations.

Conclusion

Despite the U.S.'s efforts to hinder China's technological and economic growth through sanctions, China has not only adapted but has also emerged stronger, particularly in its tech and EV industries. The Chinese government’s strategic support and the patriotic sentiment of its people have been key factors in this resilience.