On April 16, the Commerce Department denied export privileges to the Chinese phone and telecoms giant ZTE for seven years. This ban means that ZTE will no longer be able to buy technology from American suppliers, including chips and other critical components central to its products.
The ban didn’t get much attention outside the specialist business press in the United States. In China, it is being treated as a political and economic earthquake—and one that may have dramatic aftershocks. For years, the United States complained that China’s economic policy is driven by nationalism and the desire to protect native companies. Now, Chinese political debate depicts U.S. regulators as an existential threat. The Chinese government is marshaling a national strategy to make companies like ZTE less dependent on foreign suppliers.