The U.S. launched yet another broadside at China’s technological ambitions this week by blacklisting more than 60 Chinese companies including Semiconductor Manufacturing International Corp., China’s leading chipmaker. While the action will be painful, over the longer term it could be a shot in the arm.
Over the past two years, President Xi Jinping has increasingly stressed the need for China to develop “secure and controllable” supply chains for key technologies. That’s easier said than done. The track record of Chinese industrial policy is mixed at best. The government has spent hundreds of billions of dollars on subsidies in recent decades and failed to achieve technological leadership in most industries.
