China is building a Great Economic Wall amid rising trade tensions. Illustration: AI Generated / China Factor

China’s Great Wall 2.0 is going up at breakneck speed

Beijing is aiming to lock in its economy and at the same time lock out the rest of the world

ByChina Factor Staff

China is building a Great Wall 2.0 to block money, technology, and companies from escaping the country. Last month, the State Council rolled out national security screening rules for Chinese corporations planning to invest overseas.

The decision by the administrative arm of the Communist Party followed moves in April to stop the relocation of supply chains outside China. It also came just weeks after Facebook-owner Meta saw its US$2 billion bid for Chinese AI startup Manus blocked by Beijing. 

Further bricks in the wall included a travel ban on artificial intelligence professionals, startup founders, and researchers at private high-tech giants. They include the online behemoth Alibaba and the AI research lab DeepSeek.

“Nothing shows a lack of confidence in the future of a country quite like taking away the passports of your best and brightest because you are terrified that they might defect,” Matt Turpin, of the Hoover Institution, wrote on his Substack site at the weekend.

Beijing is grappling with a tale of two economies.

Trade raid:

  • Taken together, the measures amount to a blueprint for the economic fortress China is building around technology and supply chains, The New York Times reported last week.
  • Yet this should come as no surprise amid “rising tensions” between China and its two key trading partners, Europe and the United States.

Delve deeper: “Beijing [is making] desperate attempts to prevent Europe from opening a second trade war against them, as the one with the US simmers in the background, unresolved,” Turpin pointed out on China Articles.

Big picture: From Brussels to Washington, “the world’s largest economies are choosing trade barriers over greater economic integration,” The New York Times warned.

Bottom line: “This is driven in part by heightened concerns over China’s global dominance in raw materials, manufactured goods, and technology, as well as a surge in Chinese products around the world,” according to the New York-based media group.

China Factor comment: But as this unfolds, Beijing is grappling with a tale of two economies. Domestically, consumer spending has dried up to a trickle since 2023. At the same time, state-subsidized high-tech products have flooded overseas markets, creating trade wars.