China Started Separating Its Economy From the West Years Ago

Keith Bradsher

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China is able to pressure the U.S. economy, while making it harder for Washington to block China.Credit...Eric Lee/The New York Times

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Two decades of sustained effort to build national self-reliance and minimize imports have antagonized trade partners but fortified what a senior adviser called Beijing’s “bulwark” against conflicts.

China is able to pressure the U.S. economy, while making it harder for Washington to block China.Credit...Eric Lee/The New York Times

President Trump has used tariffs to try to reduce American reliance on Chinese exports and prevent China’s factory overcapacity from swamping the U.S. economy. But his effort has hit an obstacle: Beijing was already well on its way to weaning its economy from the United States.

For two decades, China has systematically pursued economic self-reliance. China has been able to establish choke points to pressure the U.S. economy, while making it harder for Washington to block China.

Self-reliance has been a cornerstone of Chinese policymaking not just under Xi Jinping, the country’s top leader since 2012, but also under his predecessor, Hu Jintao.

Their program of replacing imported manufactured goods with domestic production has been costly and often inefficient. But it has left the West with dwindling leverage it can deploy during disputes.

China’s leaders have become increasingly public about emphasizing the self-reliance drive. It took a prominent place at an annual gathering of the Communist Party’s Central Committee last month, when the country’s top officials laid out a sketch of China’s next five-year plan.

“We must first and foremost intensify efforts toward achieving greater self-reliance and strength in science and technology,” Mr. Xi said in a speech.

This year, China has wielded one of its most powerful choke points — its almost complete control over the world’s supply of rare-earth metals and rare-earth magnets.

Faced with restrictions on China’s supply of rare earths, Mr. Trump last week accepted a compromise with Mr. Xi.

President Trump with China’s president, Xi Jinping, in South Korea last month.Credit...Haiyun Jiang/The New York Times

Their agreement left this year’s new U.S. tariffs for China similar to those for countries in Southeast Asia and lower than the tariffs for countries like India and Brazil, with which the United States has traditionally maintained closer relations.

China’s threat to put extremely tight controls on its rare-earth exports also helped persuade the Trump administration to suspend a policy it adopted in September to expand the number of military-related Chinese companies that Americans are not allowed to do business with.

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China has gained other choke points through its policies of manufacturing self-reliance. It is the world’s dominant producer of the ingredients needed to make antibiotics and other pharmaceuticals. It is also the main producer of a lot of electrical equipment, low-end computer chips and much more.

The United States has been left with fewer options when it needs to fight back. When Washington wanted to pressure Beijing to back down on rare-earth export controls, the Trump administration threatened to restrict some of the last categories of crucial American exports that China still needs, like aircraft parts.

Chinese officials are now calling for their country to become even more self-reliant.