Just look at the current landscape of how China has been innovating through various trade related sanctions, bans, and tariffs. Just like lions, tigers and bears, oh my! Of course, in this case the scarecrow was the only one without a brain, so Dorothy, the lion, and the tin man had no excuse. If they were Chinese, they would have surmised that the yellow brick road is not the only path to finding the wizard. Nope. They would have used high tech surveillance drones. (Confused? See the movie The Wizard of OZ if you are young and live outside of the US) Necessity has always been the mother of invention, and in the case of China and the never-ending western pressure it has also been the catalyst in many cases for that which ultimately drives them to create and overcome. Let’s look at just a few examples as there are too many for one article.
Advanced Microchips: The original Chinese chip ban via the U.S. and other nations in the mix, Netherlands, Japan and S. Korea, was a wakeup call to Beijing. However, after a few minutes of panic, they did what they always do, hyper focus on the problem, and innovate. Subsequently, most recently what was to be expected when the Trump Administration decided to allow NVIDIA and Intel to sell chips to China (the supposed lower end H20’s from NVIDIA) didn’t exactly happen the way they planned. The transactional arrangement provided the U.S. government with a 15% commission on the sale of the chips, and a huge bounty to be had as China would of course gobble them up as desperate as they are for the technology they lacked. Nope. Not what happened. Instead, Beijing banned companies from placing orders with NVIDIA. Whoops! If there is one thing that will come out of this chip war, it’s that China is hell bent on becoming totally independent in the making of their very own advanced microchips, and I have absolutely no doubt that they will succeed in the very near future. As a matter of fact, they already have succeeded to a certain extent, and not through reengineering, but through reimagining the overall process of creating the most advanced chips.
To date, the U.S. has committed over $300 billion into microchip manufacturing and at the same time has blocked China from possessing the high-end lithography process (EUV) owned by ASML in the Netherlands. In addition to this agreement with ASML the U.S. and Taiwan’s TSMC are trying to duplicate their exact production process in an Arizona desert and face the harsh reality of what that undertaking actually means step-by-step. It’s a tough environment to reproduce the most advanced microchips on the planet that entails about 4,000 different crucial elements that go into the production of a successful “yield” of chips, meaning not one nano particle of dust or anything less than 100% ultra-pure water can enter the system. And the manufacturing of these high end chips needs a great deal of water, in the desert no less. The duplication of the process has to be absolutely perfect or entire chip yields could be tainted, and subsequently trashed, costing millions of dollars. China is paying attention and is currently working with its top engineers to find a better way forward. Don’t duplicate, instead, innovate. They have subsequently come up with a totally different process than the extreme ultraviolet of ASML and produced chips within the highly coveted 3nm makeup. Enter a totally self-sufficient ecosystem of producing chips from the rare earth minerals (which they have in abundance) in addition to some of the top engineers in the world (inclusive of some from ASML and the US).
The pecking order of who has the planet’s most advanced chip making process is going to possibly be turned upside down. It's pretty evident that when China is faced with the west attempting to block their advancement on the world stage, they just keep coming back with innovations at breakneck speed. Yes, as previously mentioned, the US has an agreement with ASML blocking EUV machines from China, because that’s the game plan. To get a little more specific on China’s game plan they are already a gnats-eyelash from bypassing the gold standard 150-ton, size of a city bus, $350 million dollar’s each EUV lithography processors, developed and sold by the aforementioned ASML in the Netherlands, who have always led the pack with EUV production globally. What China had been sold is the DUV systems, (Deep Ultra Violet-think 28nm for most things, laptops, smartphones, etc.) but have been blocked by the US in selling the EUV equipment. It’s 28nm vs 3 nm production. Yep, the Chinese engineers have supposedly discovered two elements that provide the exact same yield as those advanced microchips that are a product ASML’s decades long in the making EUV lithography process. This is exactly what NVIDIA’s President warned the Trump administration about. The more you try to cancel China’s membership in the world of technological advancement, the more they are motivated to outshine and deliver their very own path forward, and it’s not through just reengineering, but reimaging the blueprint and execution. China’s large chip manufacturer SMIC is also deep into the production of the 3nm chip. SMIC is pushing hard into 3nm chip development, (7nm currently) and what’s remarkable is that they’re also doing it without access to EUV lithography, which is typically considered essential for nodes below 7nm. SMIC is using Deep Ultraviolet (DUV) machines from ASML—specifically the Twinscan NXT:2000i—and applying triple, quadruple, even quintuple patterning to simulate the resolution of EUV. This method is costly, complex, and lowers yield, but it’s their only path forward under U.S. export restrictions of course. They are however in collaboration with Huawei who is designing 3nm chips using Gate-All-Around (GAA) transistors, a cutting-edge architecture that improves energy efficiency and performance. Once Huawei completes the design (expected by the end of 2025), SMIC will handle the manufacturing. Huawei is also exploring carbon nanotubes and 2D materials to push beyond silicon’s limits in the process, which is a bold move that could be a giant step forward in conventional chip design if successful.
Huawei: Not just with microchip innovation has this premise of self-sufficiency rung true but just look at what happened when the US banned Huawei. They in turn have become the top smartphone producer in China moving Apple into the third spot behind themselves and Xiaomi. Huawei has made a strong comeback in China’s smartphone market in 2025, reclaiming the #1 spot after more than four years. As of Q3 2025, Huawei holds a 21% market share, shipping 12.8 million units. Also worth noting, after Google services were banned on Huawei devices, Huawei developed its own HarmonyOS, aiming to reduce reliance on U.S. tech ecosystems. They are also coming ever closer to the highly coveted 3 nanometer microchip. (According to Beijing) They have even found a way to be a focal point in the automotive business. For instance, regarding cars like the high-end Xiaomi SU7, (BTW- I just bought some Xiaomi earbuds for $71 on Amazon and they are as good, if not better, than my $300 Bang & Olufsen, and $350 Bose) and all of the tech an individual in China has on their smartphone, (Huawei and Xiaomi predominantly) which is their entire life, gets automatically synchronized with their car, as well as smart accessories in their house. Imagine how personalized that experience of driving pleasure has now become. As a result, the advancement in AI and interconnectivity has offered Xiomi, an original Chinese and well trusted maker of phones, TV,s and other high-end gadgets, an entry into the car market. Sure, I can get into my Lexus and ask Google ( I am an Android boy) to provide me with directions, and have voice assistance on music and calls, but Xiaomi has everything in one’s life interconnected to the car which translates to: Voice commands like, “Open the sunroof,” “Turn on the air conditioning,” “Set temperature to 75 degrees,” “Fold the mirrors” “Switch to sport mode” “Call [contact name]” “Navigate to [destination]” “Play music by [artist]” “Open WeChat” or “Send a message to [name]” “What’s the weather today?” “Remind me to charge the car at 8 PM” “Turn off cabin lights” “Start parking assist” “Turn off living room lights” “Activate home security system” (with a Smart Home link), what’s for dinner? I’ll stop here since the options of voice command are endless, and the perks are extremely high end including a reinvented battery that can go a distance of 415 miles on one single charge. BTW, the Xiaomi can dance. Yes, it can dance. All of this high tech reminds me of an old 80’s television series on US TV called Knight Ranger starring David Hasselholf and his KITT car which was portrayed as almost human, and actually had conversations with David taking on a personality of its own. Chinese innovation is almost there. In another article, but worth a mention here, take a look at the World Robot Conference (WRC 2025) robotic convention recently held in Beijing this August. Various Companies are at the point of producing ultra-realistic humanoid robots with lifelike skin, facial expressions, limb movements, and AI-driven personalities. These robots can engage in conversation, perform domestic tasks, and even act as emotional support. With some customization, buyers can personalize everything from the robot’s appearance to its voice and behavior. Some models even allow users to design robotic avatars for companionship, entertainment, or caregiving roles, and more, but I’ll stop there and prefer that you use your imagination.
Speaking of sophisticated EV’s. As the US continues to ban all Chinese EV’s from entering the market, BYD has not just adapted but has also captured a tremendous amount of market share at incredible speed (roughly two years) in China from Tesla, BMW, Mercedes, and VW as well as worldwide attention. The advanced tech in their cars is top notch when coupled with the price points in a very competitive marketplace. They rose from a simple battery manufacturer to a world leader in EV production rolling out, as of August 2025, approximately 353,000 electric vehicles and plug-in hybrids (PHEVs) globally. At this time, they are entering Mexico and Latin America as well. The BYD Mexico plants are on hold to evaluate the tariff landscape, which is really in question now with the proposed 50% tariff that Mexico will be putting on Chinese goods including EV’s-what???? This information is from a Bloomberg article recently. Is U.S. pressure getting to President Sheinbaum? In another scenario BYD officially began assembling vehicles in Brazil on July 1st, 2025, as a result, they quickly surged into the top 10 with 48.7% growth, now ranked 9th. Look out Fiat, Volkswagen, Chevrolet, Toyota and Hyundai. This development could see the same pace that Tesla was overtaken in China, in just 2 years. The delivery ships that BYD has built will be extremely busy in the coming years.
Speaking of ships: China's shipbuilding capacity is estimated to be over 200 times greater than that of the United States providing roughly 60% of global ship building/orders. These ships aren’t just for military purposes, but trade as well. What has helped to drive this massive undertaking in ship building? Well, since you asked, the U.S. imposed a sweeping set of Section 301 tariffs/sanctions on China’s shipbuilding, logistics, and maritime sectors in April 2025, aiming to counter what it called China’s “unreasonable” efforts to dominate global shipping. I must ask at this juncture, what the hell is an unreasonable effort to dominate anything commercially speaking in this case? Blowing up the competitions shipyards? Just how were we the catalyst for this monstrosity? Well, via more sanctions and counter measures such as: Port Entry Fees of up to $1.5 million per voyage for Chinese-built vessels entering U.S. ports. These fees increased incrementally over time to discourage reliance on Chinese ships. Mandates for U.S.-Built Ships came into play and certain U.S. exports must now use American-built vessels, especially for strategic goods like LNG and vehicles. Restrictions on LOGINK were introduced where U.S. military and federally funded ports are banned from using LOGINK, China’s state-run logistics data platform, due to espionage concerns. Tariffs on Equipment were also involved regarding ship-to-shore cranes and other cargo-handling gear sourced from China. How did this gap in production get so big? It’s called military-civil fusion where China integrates commercial and naval shipbuilding, allowing rapid scaling and dual-use innovation. There has of course also been state funding and strategic mergers such as CSSC and CSIC who have created the world’s largest shipbuilding conglomerate. It’s all about speed and scale as China can design, build, and deploy ships faster than any other nation be it military or commercial.
And what about aviation restrictions? In the tit-for-tat trade war, and in response to China blocking the export of rare earth minerals the U.S. has taken direct aim at China’s jet-building ambitions, especially targeting the development of the COMAC C919, China's flagship commercial aircraft meant to rival Boeing and Airbus. Key U.S. Actions to Stifle China’s Jet Industry are: Suspension of export licenses in May 2025, where the U.S. revoked licenses that allowed American companies to supply critical components to COMAC. This includes CFM LEAP-1C jet engines, developed by GE Aerospace and France’s Safran, which power the C919. Technology Restrictions were also included as the sanctions go beyond just engines and included the U.S. blocking exports of avionics systems, flight control tech, and other essential aircraft components. These systems were previously sourced from U.S. firms like Honeywell, Rockwell Collins, and Parker. The restrictions were meant to hit hard just as COMAC was ramping up production aiming to build 50 C919s annually by end of 2025, and 200 per year by 2029. With only 16 aircraft delivered so far, the sanctions pose a serious bottleneck. By cutting off access to Western tech, the U.S. aims to delay China's rise in global aviation and preserve dominance for Boeing and Airbus. However, China’s aviation industry has been buzzing with breakthroughs lately and some of them could be genuinely game-changing. Here are a few standout developments from 2025 that show how China is pushing the envelope in aerospace innovation: The C929 Wide-Body Jet Development where China is advancing its next-generation wide-body aircraft, the C929, led by Zhao Chunling, the first female chief designer in the country’s aviation sector. It’s designed to rival Boeing’s 787 and Airbus’s A350. Focused on smarter avionics, better airport operations, and enhanced passenger comfort Zhao’s team achieved certification for the world’s most stringent crew-alerting system on the C919, and now they’re applying that rigor to the C929. China also revealed its first compound helicopter, featuring coaxial rotors and a pusher propeller, which translates to higher speed and greater agility vs traditional helicopters. This is part of a broader push toward next-gen vertical lift platforms, akin to the U.S. Future Vertical Lift program. There are also high-speed jet drones in the mix of innovations that can launch from warships even in rough seas. When combined with vertical takeoff and long-range cruise flights, this could revolutionize naval aviation by turning any warship into a drone carrier. This represents a fundamental leap in runway-independent aircraft design. Regarding international expansion, COMAC Jets China is actively negotiating with countries like Vietnam to lease its C909 jets, signaling a push to challenge Boeing and Airbus globally. COMAC of course aims to establish a fully independent supply chain. The C919 has already entered service with major Chinese airlines, and the C929 is next in line. These breakthroughs show China isn’t just catching up but instead is laying the groundwork to reshape global aviation.
DeepSeek. I would be remiss in my proclamation of Chinese innovation and ultimate domination of anything and everything high tech if I didn’t mention DeepSeek. As we continue to delay finding a way to overtake TikTok (ByteDance) ownership DeepSeek is disrupting the foundation of the global AI landscape. In 2025, this Chinese startup has surged from relative obscurity to become a serious contender against U.S. giants like OpenAI, Anthropic, and Meta. DeepSeek is rewriting the rules of when power meets cost efficiency. DeepSeek V3.1, released quietly in August 2025, boasts 685 billion parameters and scored 71.6% on the Aider coding benchmark. The Aider coding benchmark is a rigorous test suite designed to evaluate how well large language models (LLMs) can write, edit, and refactor code across multiple programming languages—without human intervention outperforming Claude Opus 4 by 1% (Claude Opus 4 is Anthropic’s flagship AI model released in May 2025, designed to tackle the most complex tasks in coding, reasoning, and autonomous agent work) while being 68 times cheaper. It supports up to 128,000 tokens of context, rivaling the best in long-form reasoning and multi-turn dialogue. Previously unknown to most of us, (be honest) there is something called Hybrid Architecture Breakthrough. This is where DeepSeek V3.1 integrates chat, reasoning, and coding into a single model—something most competitors struggle to do without trade-offs. It uses a mixture-of-experts (MoE) design, activating only relevant subnetworks during inference, which slashes compute costs. The MoE design is, short for Mixture of Experts, and is a cutting-edge architecture in AI that’s reshaping how large models scale and perform. With Made-in-China hardware of course DeepSeek is developing its own AI chip, fully designed and manufactured in the mainland, potentially pushing Nvidia out of the Chinese market. This move is a direct response to U.S. export bans and could reshape both the AI and crypto hardware sectors. By releasing models as open-source, DeepSeek bypasses geopolitical friction and invites global adoption. Tesla, BYD, and other firms are already integrating DeepSeek into their vehicles and platforms to comply with China’s data localization laws. To be blunt, DeepSeek’s rise is more than just technical, as it’s also geopolitical and philosophical. It challenges the Western paradigm of closed, expensive AI systems and shows that algorithmic efficiency and strategic adaptation can rival brute-force computing. Silicon Valley is paying attention.
And now, allow me my usual digression: I could go on, and on, regarding China’s tech victories, but what’s the point, as I have made mine. The more the US presses China, the more they find a way, to build their very own supply chains and self-sufficient production ecosystems, with absolutely no assistance from outside their borders. (Except a few engineers) When will the US wake-up, stop the trade bashing, and propose something that China and the US, can benefit from together based on current global circumstances, such as the fact that there are approximately 800,000 homeless people in the U.S. alone. (30% are in California). At the same time, there are 50 ghost cities in mainland China with 65 million vacant, but fully built apartments, enough to house 195 million people. (Roughly 3 per unit) These two problems do warrant a common solution, which is humans actually living in the already completed structures. The transfers of humanity from the US to China would be vetted of course. First and foremost, those Chinese citizens who have lost thousands of yuan in these failed real estate investments must be made “whole again.” The real estate collapse led by Evergrande is a tragedy, and the government needs to step in and clean up the mess via 100% refunds to the population, with interest, which can be done with US assistance. We could show the world a completely different picture of two global powers collaborating for the good of co-existence on the planet instead of spending billions of dollars and hours on discovering different ways to kill each other, be it civil or commercial. OK, I’ll take my Pollyanna thinking cap off now because what was recently on display for the world to see, with Xi Jinping, Putin, Modi and Kim Jung Un demonstrating their plans in taking the world in a totally different direction buries any legit thoughts of collaboration.
