China’s push for technological self-reliance does not signal a retreat from globalisation, but a strategy to remain globally integrated while reducing strategic vulnerability.
Chinese technology companies relied heavily on Nvidia’s artificial intelligence chips, with the company continuing to design China-specific products despite US export controls. Yet in September 2025, Beijing reportedly instructed major firms to accelerate the adoption of domestic alternatives.
The decision to forgo superior foreign technology reflects Beijing’s growing view of dependence as a source of strategic vulnerability — and, more fundamentally, its understanding of the purpose of globalisation.
Huawei’s advances in chip design tell a similar story. Despite years of sanctions and restricted access to advanced semiconductors, the company has continued to invest heavily in domestic capabilities.
The underlying lesson is that China is increasingly willing to accept short-term costs to achieve long-term strategic independence. Successive Chinese Communist Party and state documents frame global economic integration as a means of advancing technological upgrading, industrial modernisation and national development. Openness is not presented as an end in and of itself. The 14th Five-Year Plan elevated scientific and technological self-reliance as a national strategic priority, while reaffirming China’s commitment to opening up.
The Chinese Communist Party’s 2024 Resolution on Further Deepening Reform reinforces this approach, describing opening up as ‘a defining feature of Chinese modernisation’ even as it calls for stronger innovation systems, industrial resilience and supply-chain security.
A remarkably consistent conception of globalisation emerges from these documents. Openness and self-reliance are presented as complementary pillars of China’s long-term national development. This conception differs from a dominant strand of post-Cold War Western thinking, which viewed globalisation as a pathway towards deeper interdependence and gradual convergence.
For Beijing, globalisation has been valued primarily as a means of advancing national development. Integration into global markets facilitates technological acquisition, accelerates industrial upgrading and strengthens national capabilities while promoting strategic autonomy. Self-reliance is not an alternative to globalisation, but a prerequisite for ensuring that continued openness serves China’s long-term development.
Beijing’s conception of globalisation has found expression in successive industrial and economic policies. Made in China 2025 placed indigenous innovation at the centre of China’s efforts to upgrade manufacturing and reduce technological dependence in strategic sectors. The subsequent dual circulation strategy proposed a ‘new development pattern’ in which the domestic economy forms the mainstay of China’s economy while domestic and international circulation reinforce one another.
Far from signalling economic retreat, these initiatives seek to ensure that China remains globally integrated from a position of stronger national capabilities, greater industrial resilience and reduced strategic vulnerability.
The Resolution on Further Deepening Reform simultaneously emphasises industrial resilience, secure supply chains, national security and breakthroughs in core technologies alongside its message of opening up. Rather than equating globalisation with unrestricted openness, Beijing increasingly distinguishes between expanding international engagement and relinquishing control over the capabilities that underpin long-term competitiveness. Chinese firms are encouraged to globalise, but critical technologies, industrial ecosystems and strategic assets are expected to remain anchored within China’s strategic development framework.
In the commercial aviation industry, China relied heavily on Boeing and Airbus for decades to meet the demands of its rapidly expanding aviation market. The development of the C919 by COMAC — a state-owned aerospace manufacturer — reflects a long-term effort to build domestic capabilities in a sector long dominated by foreign suppliers.
Facing tariffs, geopolitical pressures and growing uncertainty, Chinese firms across a range of industries are also increasingly establishing production facilities, research centres and supply-chain networks overseas. This trend — widely described in China as chu hai (‘going overseas’) — does not represent a retreat from globalisation. Instead, it reflects Beijing’s conviction that global expansion should follow, rather than precede, the development of stronger domestic technological and industrial capabilities.
Chinese firms such as BYD are exporting not only products but also production networks, technology and industrial capabilities. BYD’s 2025 investment in Hungary illustrates how Chinese companies are becoming more deeply embedded in overseas markets while selectively extending elements of China’s industrial ecosystem abroad.
China’s expanding global industrial presence has prompted governments to reassess their economic engagement with Beijing. For many advanced economies, China’s state-backed industrial strategy is increasingly viewed through the lens of economic security, as growing technological capabilities and manufacturing dominance are seen as creating new strategic dependencies. This has encouraged tariffs, investment screening and de-risking policies.
Many developing economies by contrast, continue to welcome Chinese investment and manufacturing as opportunities for industrialisation while seeking to diversify their external partnerships. China’s efforts to reduce its own vulnerabilities are in turn generating new concerns about dependence elsewhere.
This transformation is also shaping how other countries respond. Advanced economies increasingly rely on tariffs, investment screening and de-risking policies, while many developing economies continue to welcome Chinese investment even as they pursue greater diversification. China’s efforts to reduce its own vulnerabilities are, in turn, generating new concerns about dependence elsewhere.
Deep economic interdependence makes disengagement extraordinarily difficult, even as China and the West seek to reduce strategic dependence on each other. Neither side is abandoning globalisation, but they are seeking to make it more conducive to their own long-term security, prosperity and resilience.
Republished from East Asia Forum
G Venkat Raman
G Venkat Raman is Professor at the Indian Institute of Management Indore. He is a Fulbright Fellow and holds a PhD from Peking University’s School of Government. He has lived, studied and conducted research in China, and received the India–China Cultural Exchange Fellowship and Nehru Memorial Fellowship. His research focuses on China’s political economy, BRICS, global governance, international political economy and the geopolitics of business.