China Just Showed Washington How It Plans to Fight the Next Trade War

Business|China Just Showed Washington How It Plans to Fight the Next Trade War

When Donald J. Trump fired the opening shots in a trade war during his first term, Chinese officials often took days to respond and Chinese businesses followed every threat with alarm.

But this week, after the Biden administration broadened its restrictions on advanced technology that could be sent to China, Beijing announced sweeping retaliation in a single day. The country’s stock market investors mostly shrugged at the Biden administration’s action.

And on Wednesday, General Motors, a onetime cornerstone of American industrial might, said it was taking a $5 billion hit to profit to recognize that it was no longer able to adequately compete with Chinese carmakers.

The fast-moving developments have underlined how far China has come as an industrial superpower, and its readiness for a potentially bruising battle with the second Trump administration. China now has a manufacturing sector that is larger than those of the United States, Germany, Japan, South Korea and Britain put together. It produces some of the world’s most advanced technology.

There are a few areas in which China has not caught up with the United States, with the most advanced semiconductors perhaps being the most prominent. But in many other sectors, including all but the fastest semiconductors, its manufacturers are coming close to ending their dependence on American supplies.

That was evident in the announcement on Tuesday by four government-linked trade associations that urged Chinese companies making everything from cars to communications equipment to be wary of buying any more American computer chips.