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Monday, October 20, 2025
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Commentary: China ban on Nvidia chips is not just about a trade spat

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China is tightening its focus on Huawei and home‑grown chipmakers, showing that it is willing to sacrifice a few gains today to build an AI future that can compete worldwide.
Howard Yu, an analyst at IMD, pointed out that this strategy reflects a long‑term vision. “By doubling down on Huawei and domestic chipmakers, China shows it is willing to lose ground now to achieve its AI future,” he says.

The move comes as China faces pressure from global tech rivals, especially in the field of computer chips that power artificial‑intelligence applications.
Instead of relying on foreign suppliers, Beijing is investing heavily in its own semiconductor industry. Huawei, whose name is now recognized worldwide for smartphones and telecom gear, has become a centerpiece of this effort.

China’s plan is not without risk. Short‑term setbacks are expected as domestic manufacturers catch up with the tech heavy‑weights of the West. However, industry experts argue that the trade‑offs could pay off once China’s chips reach a higher performance level.

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The focus on AI also ties into broader goals of the Chinese government. By prioritizing the development of self‑sufficient chip technology, China hopes to reduce its dependence on external markets and strengthen its position in the global tech race.

Industry observers note that the country’s strategy will need solid backing from both public and private sectors. For now, the emphasis remains clear: boost Huawei and local chip makers, even if that means accepting a temporary dip in competitiveness.

If China succeeds, its AI capabilities could become a benchmark for the next wave of global innovation, proving that a short‑term pause can lead to long‑term gains.


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