by IMRAN KHALID
China has the chance to write the rules that govern the next decade of chips, magnets, and green technology.
The latest Sino-American “handshake”—a 90-day pause on tariffs, semiconductor export bans, and rare-earth chokeholds agreed in Geneva and revived in London this month—was never meant as a love-in. It is a grudging ceasefire, a chance for each superpower to breathe, re-stock, and, above all, rewrite the operating manual of twenty-first-century techno-commerce. The United States plainly hopes the pause will buy time for fresh sanctions should Beijing misbehave. China, if it chooses, can reach for something more ambitious: authorship of the very rules that govern the next decade of chips, magnets, and green technology.
Beijing still supplies more than 90 percent of the world’s rare-earth magnets, the irreplaceable slivers of neodymium, dysprosium, and terbium that make electric vehicles glide and precision missiles swerve. In May, China’s overseas shipments of these magnets plunged to 1,238 tons—down 74 percent year-on-year after export licenses were tightened, reminding Detroit and Düsseldorf who really holds the screwdriver. A nation with that kind of market share does not merely play defense; it can dictate the size and color of the football.
The will to lead is already evident in fiscal muscle. The third phase of the National Integrated Circuit Industry Investment Fund—popularly known as the “Big Fund”—injected 344 billion yuan, or roughly $47.5 billion—into domestic chip-making capability. That move, in tandem with a growing roster of state-backed AI hardware ventures, is not a mere survival strategy. It is groundwork for a future in which China plays architect, not just assembler.
Yet money does not by itself bestow regulatory authority. If anything, it demands follow-through: norms, standards, and protocols that ensure that the state-led industrial ascent translates into global rule-making capacity. Markets may be influenced by subsidies, but they are governed by trust—codified, repeatable, enforceable trust. That is the terrain where China must now plant its flag.
The global semiconductor market, projected to grow from $627 billion in 2024 to nearly $697 billion by the end of 2025, offers the perfect proving ground. China currently accounts for about 16 percent of total production—well short of its ambitious Made in China 2025 goal of 70 percent self-sufficiency, but sufficient to make it the world’s third-largest chip producer behind Taiwan and South Korea. Even incremental gains in this space amplify its voice in shaping what kind of semiconductors get built, for whom, and under what terms.
Ironically, it’s U.S. strategy that has sharpened China’s clarity. Export bans on advanced chips and manufacturing equipment, intended to choke Beijing’s AI momentum, may have yielded the opposite result. Nvidia CEO Jensen Huang has admitted that U.S. export curbs have not halted Chinese innovation but spurred it. His company’s share of China’s AI chip market has already declined from near total dominance to just over 50 percent. When even Silicon Valley’s elite begin admitting the limits of coercive leverage, the time is ripe for Beijing to shift from reactive position to proactive codification.
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