From Open Markets to Forced Autarky: Who Really Made Trade with China Impossible?
Two years ago the Financial Times published a headline that still stings in Washington:
“Sorry America, China has a bigger economy than you.”
The article was referring to purchasing-power parity (PPP)—where China’s output had long been larger, by some measures a full third bigger than America’s—but the psychological blow landed just the same.
Just a few days ago the same newspaper returned with an even more dramatic warning: “China is making trade impossible.” The core accusation was blunt:
“There is nothing that China wants to import, nothing it does not believe it can make better and cheaper, nothing for which it wants to rely on foreigners a single day longer than it has to”.
The irony, of course, is almost suffocating.
For the past decade it has been the United States and its allies who have systematically made ordinary trade with China impossible:
Entity-list executions for Huawei, SMIC, and dozens of other leading firms
Suffocating export bans on advanced semiconductors and lithography machines
Heavy 100 % tariffs on electric vehicles
Open threats to cut Chinese banks off from the SWIFT system, thereby dealing them a potentially fatal blow
Intensive lobbying from Silicon Valley to ban Chinese open-source AI models for “security reasons”
This list is by no means exhaustive.
China is not marching toward self-sufficiency out of an ideological preference for autarky, but because the West has convincingly demonstrated that technological and financial dependence on a hostile superpower is incompatible with its own survival.
The Cost of Containment: Middle Powers Bear the Burden of a US-China Conflict China Never Wanted
The collateral damage of this new economic regime will not be limited to Beijing or Washington. China, the US, India, and Russia have large domestic markets, but countries without such huge markets of their own—Germany, Japan, South Korea, the Netherlands, Switzerland, Australia, Brazil, and much of the rest of the world—depend on exports to secure their prosperity. When two continent-sized economies deliberately decouple from each other in a conflict that neither player can fully control, the export-dependent middle powers bear the heaviest burdens of a confrontation that China neither started nor ever wanted.
The Thirty-Year Deal That Was Never Meant to Be Fair
In the 1980s and 1990s American corporations found paradise on the Pearl River Delta:
Hundreds of millions of well-educated, disciplined workers were available at a fraction of Western wages. Back then, the West had no complaints about “overcapacity” or Chinese domination of global markets while Chinese factories busily produced Nike sneakers, plastic toys, and rubber ducks for Western brands. Such concerns only emerged once China dared to move up the value chain.
Ports, railways, power grids, and industrial zones already built by decades of state planning
A government that delivered stability through predictable governance and sustained economic growth
The unspoken deal was crystal clear: America kept the brain – design, chips, software, and brand building. China kept the hands – assembly and low-margin manufacturing. Profits should rise forever and flow to the West.
For many years, this worked: Apple, Nike, Walmart, Intel, and General Motors made billions in profits; shareholders celebrated the supposed “end of history”; economists praised the immutable logic of comparative advantage.
However, Beijing had never agreed to the “forever” part.
China Refuses to Remain the Eternal Subcontractor
From the late 1990s, and especially after WTO accession in 2001, China executed the most successful industrial upgrade in recorded history:
Huawei eclipsed Nokia and Ericsson
BYD overtook Tesla as the world’s largest EV producer
CATL now supplies a third of global EV batteries
Chinese firms make 80 % of the world’s solar panels and are rapidly closing gaps in semiconductors and AI
The apprentice learned the master’s tricks — then improved them and sold them cheaper.
The Panic Button
Washington did not respond with admiration or healthy competition. It responded with containment.
In 2022, Elon Musk warned investors that BYD, without protection, would “wipe out most other automakers.” Two months later, the U.S. government imposed 100-percent tariffs on Chinese electric vehicles, rendering them uncompetitive and virtually unsellable. Silicon Valley tech giants pushed for restrictions on Chinese open-source AI models for “security reasons.” The arguments shift depending on interests: sometimes economic protection from competition is cited, sometimes “security concerns” – the same rhetorical trick, applied according to whichever measures are convenient at the moment.
Direct military conflict is practically impossible; Pentagon simulations end in disaster for both sides. Economic warfare is the only remaining option.
China’s Response: The Oldest Playbook in Its History
Every time the outside world turns hostile or chaotic, China reaches for the same thousand-year-old reflex: pull into the shell, fortify the inner realm, and wait.
Former Singapore Foreign Minister George Yeo calls it the “tortoise strategy.” When the forest is on fire, the tortoise does not try to outrun the flames. It hardens its defences and outlasts the blaze.
Exactly this pattern—the strategic “redoubt,” the retreat into a strong center—has been China’s response to existential threats for millennia. It is not a sign of weakness, but the consistent implementation of a political legitimacy that is not derived from elections or financial elites, but from proven competence in service of the common good. In my article “When Imperial China Had a Vietnamese Prime Minister: The Surprising Origins of Meritocracy—And Why It Outperforms the West More Than Ever”, I have explained in detail why precisely this competence-based legitimacy forms the true foundation of China’s long-term stability and resilience—and why it enables the country, even under massive external pressure, to maintain control and use the “redoubt” not merely as an emergency measure, but as a platform for its next rise.
This illustration contrasts the European ancestors of the Iron Age—painted with woad dye and hunting in tribal forests—with the far more advanced Chinese civilization of the contemporary Shang dynasty (c. 1600–1046 BC), in which sophisticated bronze casting techniques, oracle bone script, and strategic statecraft were already flourishing (Grok/F.A.)China’s history is rich in comparable moments: The Song Dynasty created the wealthiest economy of its era despite hostile steppe empires; the late Ming Dynasty tightened the maritime trade ban in the face of European expansion and prioritized internal stability; the Qing Dynasty initiated the Self-Strengthening Movement after the Opium Wars forced upon it by the British Empire; Deng Xiaoping’s maxim in the 1990s was to conceal one’s strength and bide one’s time; China responded to the 2008 global financial crisis with a massive stimulus package, the promotion of the domestic economy, and the stabilization and further development of strategic sectors; and finally, the trade war, the pandemic, and the new Cold War from 2018 onward gave rise to strategies such as “Dual Circulation” (双循环, shuāng xúnhuán) – a concept aimed at making the economy less dependent on foreign demand and imported technology, strengthening domestic consumption, and keeping China integrated into the global economy nonetheless – as well as extensive semiconductor initiatives and export controls on rare earths.
Today the response is identical: accelerate technological autonomy, secure food and energy, expand domestic consumption, and let the outside world exhaust itself.
The Real Story Behind “China Is Making Trade Impossible”
China still hosts the world’s largest import expo every year in Shanghai. It remains the top trading partner of many more countries than the United States. It is not embracing autarky out of ideological fervour.
It is embracing it because the West has spent a decade proving that open dependence on a hostile superpower is no longer compatible with national survival.
On one point, the Financial Times is right: today, there is very little that China considers indispensable from the West. But this is not arrogance.
It is the entirely rational response of a civilization that, over 4,000 years, has repeatedly experienced what happens when the center fails to hold — including devastating civil wars that killed millions.
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Felix Abt is an entrepreneur, author and travel blogger living in Asia.
With his articles, he tries to make a modest contribution to debunking the omnipresent propaganda of the mainstream media for those who don’t have the time (and that’s most people) to do the research to see through it.
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