US Export Curbs Have Reshaped China’s Tech Scene Around ‘Chokepoints’

The latest report from Morgan Stanley highlights the profound impact of US export controls on China’s tech landscape. Chinese technology companies are concentrating investments around “chokepoints,” critical bottlenecks that have become the focal point for breaking free from foreign dependencies and accelerating development.

A significant shift has occurred in the new public listings on Shanghai’s Star Market, with 20% of companies going public in 2026 tackling these chokepoints. This is a substantial increase from just 8.1% in 2022. The trend towards self-sufficiency is also reflected in the growing number of firms contributing to China’s supply chain resilience – now at 60%, up from 41% four years ago.

The semiconductor supply chain has emerged as the most critical chokepoint, with 19 out of 21 companies identified by Morgan Stanley operating within this sector. This focus on electronics is not surprising given the crucial role semiconductors play in driving innovation across various industries. However, it raises concerns about China’s long-term reliance on foreign technology and its vulnerability to disruptions in global supply chains.

A new wave of domestic companies has emerged to tackle these bottlenecks, gaining significant traction and now able to access capital markets to further accelerate their growth. This marks a turning point for China’s tech sector as it begins to transition from mere imitation to innovation-driven growth.

China’s focus on chokepoints will create new opportunities for collaboration and knowledge-sharing between domestic and foreign companies. However, it also raises concerns about the country’s willingness to engage with international partners and adhere to global norms. Beijing’s industrial policy is driven by a desire for technological sovereignty and reduced reliance on foreign technology, but this may lead to a narrowing of its innovation agenda.

China has been at the forefront of pushing boundaries in emerging technologies such as artificial intelligence, quantum computing, and biotechnology. However, its increasing focus on chokepoints may prioritize short-term gains over long-term strategic partnerships with foreign companies. The US export curbs that triggered this response may eventually be relaxed or modified, but their impact on China’s tech sector will likely endure.

As the world watches China’s tech scene unfold, one thing is clear: this shift towards chokepoints will have far-reaching implications for the global tech landscape. It remains to be seen whether Beijing’s efforts will yield the desired results or merely create new vulnerabilities in an already complex and interconnected world.