China Turns Its Industrial Might Into a New Weapon
China Turns Its Industrial Might Into a New Weapon
China’s campaign to control strategic exports is moving beyond rare earths and into the machinery, software and production know-how that underpin modern industry. The immediate test may be tunnel-boring machines: giant Chinese-made drills that India uses in the Himalayas to improve military mobility along its disputed border with China. Starting this month, Beijing could decide whether Indian buyers can obtain them.
Over the past month, authorities have moved to restrict dozens of technologies, including drones, AI models and agents, solar-panel manufacturing processes and methods used in advanced medicines. The effect could be twofold: limiting foreign access to China’s most capable AI systems while making it harder for competitors in the United States and elsewhere to build solar-equipment supply chains of their own.
For Xi Jinping, the shift follows a strategy shaped during the pandemic, when China’s own dependence on overseas medical equipment and components was exposed. He called for “trump card” technologies in areas such as renewable energy, rail and telecommunications—assets meant to make China more self-reliant while discouraging other powers from cutting it off.
Chinese officials and analysts frame the controls as defensive. Sun Chenghao of Tsinghua University said Beijing is thinking more systematically about what can be exported, to whom and for what purpose, citing AI’s cyber risks and the possible military use of tunneling and dredging equipment. “These risks,” he argued, justify closer scrutiny.
But the wider context is reciprocal economic coercion. Washington’s restrictions on Chinese chips and software constrained China’s AI ambitions; Beijing later used rare-earth export limits in its trade confrontation with the United States. Zhao Minghao of Fudan University said China fears losing that particular lever and is asking: “What other cards does China have in hand?”
The gamble is that leverage will strengthen China without driving customers away. India was already seeking alternative tunnel-machine suppliers after export delays beginning in 2024. And Scott Kennedy of CSIS warns that an obsession with shielding technology risks slower growth, more debt and an unsustainable model of “doing business through threats.”
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