Many outside observers increasingly argue that China is practicing a form of “economic statecraft,” weaponizing export controls and deploying them as instruments of leverage in geopolitical disputes. In Europe in particular, this debate has sharpened as policymakers and businesses increasingly see themselves as exposed to coercion and being placed in the crosshairs of Chinese measures. Whether or not one accepts that characterization — or agrees on Beijing’s underlying motives — the perception itself has become widespread, and it now shapes how Chinese policy moves are interpreted and how governments and international businesses respond.
Before rendering a verdict, we should first understand China's policy rationale for export control governance and place China’s export control posture in its broader strategic context: the country’s evolving development strategy and the external environment in which that strategy has unfolded. When the first trade-law provisions touching export controls were introduced in 1994, followed by the first export control action in 1997, Beijing largely conceived of itself as the “world’s factory,” — an identity anchored in Deng Xiaoping’s “reform and opening up” and a growth model premised on deep integration into global markets. Export control governance at this stage was therefore primarily oriented toward participation in, and support for, the existing global security and trade architecture: aligning with international norms, managing sensitive items in ways consistent with global regimes, and reassuring external partners that China’s integration would be predictable and rule-bound.
To be sure, the Global Financial Crisis of 2007/2008 was an early inflection point, as it compelled China to reassess the external environment through a more security-conscious lens. Yet the core function of China’s export control governance remained broadly unchanged, and its export control logic stayed, on balance, moderate in geoeconomic terms. That logic, however, began to break down in 2019–2020. COVID-19 was the immediate catalyst, but the more consequential driver was the broader deterioration of China’s external environment, marked by a more unpredictable and turbulent geopolitical climate, and the acceleration of Western, primarily US, weaponization of geoeconomic tools. It was against this backdrop that Beijing rolled out “Dual Circulation” and elevated “de-risking” into a top-level policy dimension under the 14th Five-Year Plan’s strategic shift. In this new framework, geoeconomic control points and instruments, such as export controls, are increasingly treated as part of a risk-management approach to sustained external pressure and as a means to build geoeconomic capacity and power.
And how does this push to build geoeconomic capacity actually show up in policy practice? It manifests in three ways according to our recent analysis.
First, China carried out an unprecedented surge in export control actions. The tempo since 2020 is striking: from 2020 to 2025 alone, China introduced roughly as many export control actions as it did over the entire 1997–2020 period, effectively doubling the pace.
Second, the control design has become more precise, sophisticated, and “multidimensional” — that is, Beijing is no longer just tightening controls on “what” is exported and “how it will be used.” Since 2024, China has begun deploying additional control dimensions beyond content and end-use, including territory-based restrictions, entity-specific targeting, and controls that address re-export and onward transfers overseas.
Third, and most importantly, export control actions only began to take on a distinctly geoeconomic character after 2020. Before then, they largely fell into categories such as “export market governance” or “fulfilling international obligations.” The categories we classify as explicitly geoeconomic are largely absent in the 1997–2020 period and first emerge meaningfully in the post-2020 phase. By 2025, the most consequential geoeconomic type, “activating a global chokepoint,” had become dominant, accounting for more than half of that year’s actions.
However, it is important to be clear about what this surge in activity means. The post-2020 export control actions that introduced new control dimensions (territory, entity, and overseas re-export), as well as those we classify as geoeconomic in nature, are overwhelmingly retaliatory. Their timing and targeting correlate closely with punitive measures taken primarily by the US, most notably actions aimed at China's semiconductor industry, the “Liberation Day” tariffs, and the tightening of extraterritorial reach of US controls through the Affiliates Rule.
Seen in this light, China’s most consequential moves — especially “activating a global chokepoint,” i.e., controlling upstream items where China dominates supply (such as rare earths) — are best understood as a tactical instrument within Beijing’s broader response playbook to “Trump 2.0,” rather than a self-contained grand strategy. The clearest illustration is Beijing’s use of rare-earth-related controls in April to force Washington to the negotiating table following the “Liberation Day” tariffs. By demonstrating an ability to impose real, immediate costs, China exposed limits in the US toolkit and successfully shaped the dynamics towards a deal exploration — reflected, for example, in the “Busan truce.”
None of this implies a fundamental shift in China’s overarching strategic objectives. Beijing’s long-term direction remains broadly unchanged: it aims to play a more proactive role in shaping a multipolar international order — deepening strategic alignment with the Global South, as signaled in the 4th Plenum — and to sustain a China-backed model of economic globalization that is both reflective of, and conducive to, its rise.
However, the deeper implication lies in what comes after the first demonstration effect. Once the effectiveness of chokepoint activation is validated, what began as a tactical response can evolve into a more routine, low-escalation option for defending and asserting core interests — most notably Taiwan-related red lines, but also other major disruptions such as an escalation in Western technology restrictions. At the same time, as the broader US–China relationship hardens into a long-term competition — paired with a growing recognition in Washington that China cannot simply be coerced or decisively defeated — both sides have stronger incentives to rely on geoeconomic instruments below the threshold of military force, rather than direct military confrontation, in the foreseeable future.
What should businesses expect in this environment? First, a gradual transition toward licensing-based regimes covering a widening set of emerging and “future tech” items, which will be the new export-control reality. Second, retaliatory Chinese actions are likely to be temporary in duration, imposed with little warning, and calibrated to specific companies, industries, or jurisdictions in response to measures taken by key actors such as the US, the EU, the UK, or Japan. The implication is straightforward: export controls are here to stay, and they are unlikely to be meaningfully mitigated in the short term. Businesses, therefore, need not only compliance capacity but also the ability to absorb sudden disruptions that licensing alone cannot solve. Above all, businesses need internal alignment on the “big picture” of China’s trajectory so that long-term decisions remain strategically coherent and rational rather than reactive.
This article is part of the event series “Global China Conversations” of the Kiel Institute for the World Economy (IfW). On Thursday (26.02.2026, 11.00 a.m., CET), Markus Herrmann Chen and Jack Lee, China Macro Group, and Niclas Frederic Poitiers, Bruegel, will discuss the topic: “Supply Chains under Pressure: How to Understand and Respond to China’s Evolving Export Controls?” China.Table is the media partner of this event series.
Editor's note: Today more than ever, discussing China means debating controversially. We want to reflect the diversity of opinions so that you can gain an insight into the breadth of the debate. Opinion pieces do not reflect the views of the editorial team.