> America’s policymakers are also learning from their mistakes. The gradual ratcheting-up of sanctions on Huawei, and especially the 28-month gap between the announcement of the most severe measures in 2018 and their implementation in 2020, gave the firm lots of time to prepare, China hawks lament. But the bigger lesson from Huawei’s torment has not yet sunk in: that cutting the firm off from Western technology did not stifle it, but instead increased its incentives to innovate. China is still years behind the West in chipmaking. Sanctions on high-powered semiconductors have raised costs and slowed the uptake of ai for thousands of firms, as intended. Hubble’s investments are still far from replacing Western lithography machines and other components. But if Huawei was a worry when America first declared war, it is a bigger one now.
Basically, the ad hoc and imprecise sanctions regime used by the Trump admin gave too much lead time for Huawei to begin indigenizing its capabilities.
This is a mistake the US learned from and can be seen with SMIC, YMTC, and other state run champions (BYD is a domestic champion but NOT state run).
I'd highly recommend listening to Rush Doshi if you want to understand the US's China policy - he's the NSC Advisor who was in charge of China policy in the Biden admin until a couple weeks ago.