Trade & investment, explained.
A deeper shift may be the erosion of the assumption that globalisation is politically neutral (Getty Images)
Beijing is not retreating from globalisation but competing to set the terms of the next phase.
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The new political logic of global tech and tradeThe new political logic of global tech and trade
When the Pentagon recently added companies Alibaba, BYD and Baidu to a list of firms allegedly linked to China’s military (Opens in new window), it signalled a striking shift in how economic relations are understood. Alibaba is an e-commerce platform. BYD manufactures electric vehicles. Baidu is best known for search and artificial intelligence. Yet all are now seen through a national security lens. The boundary between commercial activity and strategic competition appears to be disappearing.
For much of the post-Cold War era, globalisation was presented as a largely economic phenomenon. Markets generated efficiency, supply chains lowered costs and interdependence was expected to reduce conflict. Today, that assumption is under strain. Technology, supply chains, finance, and industrial capabilities are no longer viewed as politically neutral. They are capable of generating leverage, dependence, and vulnerability.
What makes contemporary competition different is that governments focus on integrated technology networks rather than individual firms. A semiconductor company depends on design software, fabrication equipment, talent, cloud infrastructure, and access to markets. Electric vehicles depend on batteries, critical minerals, charging networks and industrial standards. Artificial intelligence depends on chips, data, computing power, and energy. The strategic value lies not in any single component but in the network as a whole. This helps explain why governments are treating commercial sectors as matters of economic security.
One of America’s most iconic manufacturers now relies on Chinese battery technology to remain competitive in the electric vehicle market.
As technology, supply chains and industrial capabilities acquire national security significance, governments respond through export controls, investment screening, industrial policy, and regulatory safeguards. Recent American restrictions on advanced technologies, the Pentagon’s growing focus on dual-use firms and Europe’s emphasis on economic security (Opens in new window) all reflect this logic. Viewed through this lens, the future of globalisation appears to be one of rising barriers, tighter controls, and greater fragmentation.
The picture, however, is more complex.
China has drawn a different lesson from the same transformation. Beijing has certainly embraced self-reliance, but self-reliance is not the destination. It is a means to a broader objective: expanding influence within the next generation of global technological and industrial networks.
Rather than viewing strategic competition primarily as a reason to restrict flows, Beijing treats it as an incentive to occupy more valuable positions within them.
Huawei’s recent unveiling of the Tau Scaling Law (Opens in new window) illustrates the point. The significance of the announcement lies not simply in China’s effort to reduce dependence on foreign technology. What matters more is Huawei’s attempt to establish alternative technological pathways capable of attracting broader international participation across research, industry, and innovation networks. Self-reliance is being used not to retreat from globalisation but to shape it.
Plugging in? (Zhe Ji/Getty Images)
The same logic is visible beyond semiconductors. Ford’s decision to license battery technology from China’s CATL (Opens in new window) illustrates how dramatically technological capabilities have shifted. A century ago, Chinese leaders looked to Western expertise to modernise their economy. Today, one of America’s most iconic manufacturers relies on Chinese battery technology to remain competitive in the electric vehicle market. The significance of CATL lies not simply in its products but in its position within a broader network spanning critical minerals, processing, manufacturing, and battery innovation.
A similar dynamic is visible in manufacturing. As recent reporting has shown, Chinese firms are exporting factories (Opens in new window) across the world. This amounts to more than production capacity. They are also exporting suppliers, standards, technologies, and industrial know-how.
Beijing’s outward orientation does not tell the whole story. Recent interventions, including scrutiny of foreign involvement in Chinese technology firms (Opens in new window), demonstrate that China is equally willing to invoke national security when it believes critical capabilities could come under external influence. The objective is therefore not unrestricted openness. It is selective control over strategic assets at home combined with the expansion of influence abroad.
Washington and other Western powers have largely focused on managing risk through screening mechanisms, restrictions, and safeguards. This is distinct from China, which has pursued a dual strategy: protecting strategic capabilities while simultaneously encouraging the outward expansion of technologies, firms and industrial networks that strengthen its position globally.
China is often portrayed as challenging globalisation. The deeper shift, however, may be the erosion of the assumption that globalisation is politically neutral. Markets, technology, finance, and supply chains remain essential sources of prosperity – but are themselves recognised as sources of power.
The emerging divide is therefore not between globalisation and deglobalisation but between competing visions: who gets to occupy its most valuable nodes and whose industrial systems ultimately set the terms of participation.
About the author
G. Venkat Raman
G. Venkat Raman is Professor of Humanities and Social Sciences at the Indian Institute of Management Indore, where he teaches and researches geopolitics, China, and global governance.
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