In three decades, China went from workshop status to the world to that of technological power capable of competing with the United States in AI, 5G, e-commerce or semiconductors. Behind this ascent, Pekin implemented a strategy to capture capital and foreign talents without giving control of his strategic companies.
The keystone of this model is the “negative list”, namely an official inventory of the open, restricted or prohibited sectors for foreign investors. Telecommunications, the Internet, Payment Services and the Cloud are “prohibited”, reserved for Chinese entities. The essential licenses to operate in these sectors (ICP for online services, Banque Populaire de China authorizations for payments) can only be obtained by locally owned companies.
At the same time, China has set up a protectionist shield, so the competing foreign platforms of national actors such as Google, Facebook, Twitter, YouTube, have been blocked or forced to leave the market, leaving a protected growth space at the Baidu, Alibaba and Tencent.
To finance their expansion, these groups used the structure Variable Interest Entity (Life). The principle consists in creating an offshore holding company, generally in the Cayman islands, which signs contracts giving it economic control of the Chinese operating entity, without directly holding its licenses. Foreign investors buy actions from the holding company and receive income, but the property of strategic assets remains in China.
This structure allowed Chinese giants to raise billions on foreign markets. Alibaba collected $ 25 billion when it was introduced to New York in 2014, a world record at the time. Baidu, JD.com or Meituan followed the same path, often by combining IPO internationals and secondary quotes in Hong Kong.
Beijing was not satisfied with authorizing foreign funding and the State, via its sovereign and provincial funds, systematically co-investing in companies deemed strategic. In some, he holds “Golden Shares”privileged actions giving a veto right on major decisions, in particular on content, governance or acquisitions.
These levers assure that, even listed at Wall Street, companies remain under Chinese control in their domestic activities.
China has mobilized its diaspora and its expatriate engineers via programs like “Thousand Talents”. The feedback from profiles trained in the United States or Europe has enabled the local R&D teams to be strengthened. In parallel, the country has massively invested in its universities, engineering schools and research centers to produce cohorts of IA, robotics and semiconductor experts.
The recruitment of foreign skills is targeted and supervised, while the sectors deemed critical remain inaccessible to foreign directions.
The “Made in China 2025” strategy has set out the aim of reducing external dependence in ten key sectors, including telecommunications equipment, electric vehicles, biotechnologies and electronic chips. China has also imposed its own technological standards, especially in AI and the Internet of Objects, and promoted them internationally through its infrastructure projects such as the Belt and Road Initiative.
This system has produced world champions like Huawei, Tiktok, Shein, capable of exporting on a large scale. But it is based on a precarious balance, the life structure remains legally fragile and depends on the tolerance of the authorities. Trade tensions with the United States, restrictions on access to critical technologies (ASML lithography, ARM architecture) and financial sanctions complicate power in certain sectors.
The Chinese model source of inspiration for Donald Trump
The American technological strategy driven by Donald Trump finds its origin in the careful observation of the Chinese model. From its first mandate, the White House was inspired by Beijing on two essential points, starting with the strict filtering of foreign investments in the sectors deemed critical and the compulsory location of strategic infrastructure.
As China had done via its “negative list” and its sectoral licenses, the United States reformed the Cfius through the Firrma Act To place AI, semiconductors, 5G, cloud and cybersecurity under reinforced control. They also used “access barrier” type measures inspired by Chinese blockages against GAFAM, by scoring Huawei and ZTE on theENTITY LIST To ban them from access to the American market and critical components.
This base inspired by the Chinese model was considerably amplified in 2025, at the start of Trump’s second term. THE Defense Production Act has become a massive financing tool to relocate the production of semiconductors and batteries, like Chinese state investments in its industrial champions.
THE Chips and Science Act Was extended with additional subsidies to attract Intel, TSMC and Samsung to American soil, while location requirements for sensitive data and targeted tax incentives were imposed on cloud players and R&D centers.
Like Beijing, Washington combined regulatory barriers, massive subsidies and strategic alignment between State, industry and finance, with the aim of securing critical chains and preventing any external technological dependence.
Teachings for Europe?
Today Europe cannot reproduce the Chinese model identically, because Community law prohibits generalized discrimination between European and foreign investors, but some levers are transposable:
- widen the definition of strategic critical digital sectors
- harmonize and harden the filtering of foreign investments
- Set up a panneopian tech sovereign fund capable of entering all strategic towers
- require the location in Europe of infrastructure and critical data
Europe, if it wants to preserve its technological sovereignty, will have to find its own balance between openness and control, under penalty of seeing its future leaders pass under a foreign pavilion.
