The struggle is best understood as a code war — originating in technology but extending far beyond it.
The United States approved the export of Nvidia’s H200 chips to China last month. Almost simultaneously, Chinese customs authorities informed brokers that the same chips would not be permitted to enter the country. Days earlier, Chinese officials had summoned domestic technology firms and issued a clear instruction: Unless absolutely necessary, they should not purchase the H200 chips.
The rapid-fire moves by the world’s two leading AI powers produced a puzzling picture. For years, Beijing had condemned U.S. export controls on advanced chips, while Chinese companies and government actors sought Nvidia’s most advanced products through every available channel, legal or other. But almost as soon as Washington loosened its restrictions, Beijing appeared to reverse course, imposing its own import constraints. Then about two weeks ago, Chinese regulators granted in-principle approval for major tech firms to prepare orders for Nvidia’s H200 chips, adding another twist to the confusing picture.
To understand this puzzle — China’s strategy in the chip war — it helps to view Beijing’s thinking through five common Chinese expressions, phrases deeply embedded in China’s historical experience and strategic culture.
‘She Who Breastfeeds You Is Your Mother’
Some American policymakers have argued that allowing sales of non-cutting-edge chips could keep Chinese AI developers “addicted” to U.S. technology, preserving Nvidia’s market share while limiting the rise of domestic competitors. In this view, binding China to a U.S.-powered technology stack would entrench U.S. leadership. But the assumption that China is willing to accept such dependence no longer holds. After years of policy reversals and increasingly explicit strategic signaling from Washington, Beijing has come to understand the calculations behind U.S. export policy.
The danger, from Beijing’s viewpoint, is that Chinese developers might grow so dependent on American “milk” that they begin to accept American authority, influence, or constraints as natural and unavoidable.
Beijing also understands that the U.S. can be, at most, a wet nurse to China’s AI industry. The best nourishment is always reserved for one’s own offspring. Beijing has concluded that the U.S. will never supply China with the technology it would need to truly rival American AI power. Accepting dependence, therefore, would mean accepting permanent inferiority.
Always Be Watchful of ‘Sugarcoated Bombs’
During the Cultural Revolution, Chinese children were taught to fear “sugarcoated bombs” — harmless-looking gifts dropped by enemies that concealed lethal intent. The phrase has since become shorthand for temptations that mask danger.
Today, advanced chips play that role in Chinese discourse. Concerns intensified after reports that Nvidia had tested “location verification” technologies, sometimes described in China as a potential “GPS backdoor.” Chinese strategists worry that chips could be remotely monitored, constrained, or disabled if used in politically sensitive contexts or locations. Nvidia has repeatedly denied the existence of any “kill switch,” and there is no public evidence that such capabilities exist in its chips. Yet from Beijing’s perspective, the mere possibility is enough. A technology that can be monitored or constrained through software becomes a strategic vulnerability.
Many Chinese commentators interpreted Washington’s easing of export restrictions not as goodwill but as a sophisticated sugarcoated bomb. Even unfounded fears can shape policy when the stakes involve national security. From Beijing’s perspective, building China’s digital future on components designed by a strategic rival is an unacceptable risk.
‘Ample Food and Clothing Through Self-Reliance’ and ‘Self-Reliance and Striving for Strength’
The first slogan dates back to 1939, when the leader of the Chinese Communist Party, Mao Zedong, urged production campaigns in Communist-controlled areas under blockade. After 1949, it evolved into the official doctrine of “self-reliance and striving for strength,” a phrase that generations of Chinese grew up hearing. The party’s official narrative credits this ethos as the foundation of China’s industrial and economic system.
That historical memory now informs Beijing’s approach to advanced technology. Self-reliance has reemerged as a core national priority, explicitly embedded in China’s latest five-year-planning documents. For a state that defines technological autonomy as central to national rejuvenation, dependence on inputs that can be restricted or withdrawn at another government’s discretion is untenable. Even the limited easing of U.S. export controls does not alter China’s determination to accelerate domestic substitution. Indeed, uncertainty itself reinforces Beijing’s resolve. Semiconductor self-sufficiency is no longer framed as an economic objective alone; it is treated as a sovereign imperative. In Beijing’s strategic calculus, technological sovereignty is increasingly synonymous with sovereignty itself.
Two recent developments illustrate the depth of this commitment. First, China’s technology ministry added AI processors from domestic firms to its government-approved supplier list for the first time, forcing public sector adoption of Chinese chips. Government procurement in China functions as a powerful industrial-policy tool.
Second, Beijing is reportedly considering state-backed semiconductor investments on a scale approaching $70 billion. China is prepared to mobilize state-scale capital to overcome structural disadvantages in fabrication, tooling, and research.
Beijing’s pursuit of technological self-reliance shows no sign of slowing.
Learning from Foreigners’ Superior Skills to Hold Them in Check
If the mindset described so far appears defensive, it would be a mistake to view China’s strategy as purely inward-looking. Nearly two centuries ago, facing Western gunboats and cannons, Qing officials articulated a strategy of learning from foreign strengths to counter foreign power. That logic has never disappeared from Chinese strategic thinking.
Today’s export controls on American chips are not absolute, and Beijing understands that its lack of access to the most advanced semiconductors remains the central obstacle to its overtaking the U.S. Chinese industry leaders openly acknowledge that without access to advanced U.S. chips, domestic AI innovation faces constraints in the near term. From Beijing’s perspective, importing Nvidia chips is a stopgap — a means to buy time, absorb knowledge, and accelerate domestic alternatives. As one senior semiconductor industry official put it, “Importing is for better catching up. Catching up will eventually lead to running alongside or even taking the lead.”
That is why China’s restrictions on H200 chips are selective, not total. China’s most recent approval of procurement of Nvidia’s H200 AI chips is only for major tech firms, including Alibaba, Tencent, and ByteDance, and Beijing is encouraging these companies to balance foreign purchases by buying domestic chips. This approach reflects a long-standing tactic: Use foreign technology selectively, learn from it intensively, and ultimately replace it.
Chinese Civilization as the Body, Western Knowledge as the Tool
At the deepest level, Beijing’s chip strategy reflects a philosophy articulated during China’s late 19th-century Self-Strengthening Movement: Preserve Chinese civilization as the core while using Western knowledge instrumentally. The original goal of this philosophy was explicit and pragmatic — to modernize China’s military and economy so it could compete with Western powers, while strictly preserving traditional Confucian culture and the imperial political system. Technology was to be borrowed, but not the values, institutions, or social order that produced it.
That logic animates Beijing’s approach to the AI age. China does not seek full technological decoupling, nor does it intend to withdraw from global trade or scientific exchange. But its ambition is unmistakable: to achieve full technological autonomy at home while competing for leadership abroad, all without accepting the Western rules, norms, or values that are embedded in U.S.-led technology ecosystems.
This is why the chip war cannot be understood as a narrow dispute over hardware access or manufacturing capacity. It marks a turning point in global technology politics, where competition is shifting from individual components to entire systems — technical, institutional, and normative. Unlike earlier general-purpose technologies, AI systems are not value-neutral. They encode assumptions about governance, speech, surveillance, and authority. Competing AI stacks therefore represent competing visions of social order.
Seen this way, the struggle is best understood as a code war — originating in technology but extending far beyond it. It is fought not only between states but across global markets, institutions, and societies. It involves values embedded and codified in AI models and ecosystems that will ultimately determine the kind of countries the U.S. and China will become in the era of AI.