In recent days, China has been pressing Washington to ease export controls on high-bandwidth memory (HBM) chips, making it a priority in trade talks ahead of a possible Trump–Xi summit. Now, chipmakers Nvidia and AMD have agreed to give the US government 15% of their Chinese revenues in order to obtain export licences for China — an unprecedented move for an American company.

Hawks in Washington warned that lifting the curbs would hand Chinese tech firms a major boost, allowing millions of AI chips to roll off production lines each year and siphon scarce microchips from US supply chains. Yet the impact of export controls has often been overstated — and their costs to the West understated.

Since 2022, US policy has aimed to choke off China’s access to its most advanced semiconductor technologies. Export controls have restricted China’s access to cutting-edge manufacturing equipment and limited the deployment of AI infrastructure abroad. The fact that Beijing has lobbied so hard to lift these measures is itself evidence that they have hurt.

Hailed by the Biden administration as the most effective brake on China’s ability to mass-produce advanced AI chips, export controls were seen by many as a decisive constraint on its technological ambitions. Three years on, however, China’s advances in AI with DeepSeek, robotics, and its own semiconductor industry tell a different story.

While export controls have caused short-term disruption, they have not prevented China from acquiring advanced chips through other means. Smuggling networks have moved tens of millions of dollars’ worth of Nvidia chips into China via transshipment hubs such as Singapore and Malaysia. Chinese firms have repurposed high-end gaming GPUs for AI training, and companies such as Tencent have optimised software to extract maximum performance from less capable hardware.

More importantly, these restrictions have given Beijing a clear strategic incentive to accelerate its own semiconductor independence. Although not as quickly as Xi would like, Huawei, SMIC, and YMTC have pushed ahead with domestic innovation, reportedly achieving 7-nanometre process chips and high-density memory production despite the embargo.

The rationale behind export controls rests on the assumption that China’s economic development can be contained. The reality is that Beijing will eventually find workarounds or develop its own advanced semiconductors capable of replacing Nvidia’s. What is unclear is whether it serves America’s interests for that moment to come sooner rather than later.

Chinese firms still fall short of Nvidia’s quality, keeping them reliant on its microchips and squeezing revenues. But far from keeping China technologically stagnant, export controls may actually be bringing closer the day that the country can produce advanced chips capable of competing internationally. Given that Nvidia’s share of the Chinese market has fallen from 95% to 54%, it is clear that Chinese firms are starting to make inroads.

This is the trade-off policymakers rarely acknowledge. While easing export controls might provide China with short-term gains, prolonging its dependence on Western chips could better serve Western strategic interests in the long run. Forcing China to develop a fully indigenous supply chain would remove that leverage.

The only way for the US to outmanoeuvre China is to double down on its technological development instead of trying to stop Beijing from advancing its own capabilities. To accomplish this, Washington needs to think less in terms of complete denial and more carefully in managing what China can access. For example, maintaining robust restrictions on access to cutting-edge manufacturing equipment for advanced microchips, while allowing US companies to continue selling in China and reinvesting their profits into innovation, combined with strategic use of regulatory levers to protect critical choke points.

In this light, easing certain export controls — far from a capitulation — can be viewed as a calculated bet that maintaining China’s dependence on Western chips is safer than pushing it toward full self-reliance.

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Miquel Vila is a political consultant specialising in international affairs. He is also the executive director of the Catalonia Global Institute.

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