As the White House pushes for sweeping restrictions to halt growth and growth Chinathe president of the last Xi Jinping starts to resist. Officials crack down on US groups like semiconductor maker Micron Technologies, but also the international company Mintz Group, which conducts investigations and collects information on the entire spectrum of the company’s activities, from recruitment to fraud. However, Beijing is not succumbing to the trend of horizontal and widespread persecution of American capital as a scapegoat. The Chinese president may even admit that he cannot afford to succumb to his annoyance just yet. Of course, Beijing has a lot of pressure tools.

The value added of China’s production in 2021 reached $5 trillion, that is, equal to Europe and the United States combined. It manufactures key industrial equipment, including mid-range semiconductors, manufactures most of the world’s active pharmaceutical ingredients, and is home to world-class competitors in high-speed rail and clean energy, including nuclear. It is the leading country in the mining and processing of rare earths, which are used in everything from batteries to guided missiles. China produced over 90% of silicon solar panels last year. However, most of Xi’s trade moves are seen as a defensive tactic at best to protect market share in the face of ambitious Western and Indian competitors. In January, the Commerce Department proposed a freeze on exports of tools used to make solar panels.

Beijing is considering implementing a similar policy for rare earth technologies. According to a recent report OECD. However, this policy is relatively conservative and is not considered a response to Washington’s measures, since it applies to everyone. The horizontal and total export ban on rare earths or active pharmaceutical ingredients that the China Economic and Security Review Commission has warned about will have a greater impact, but to be painful, it must be off-target in one country.

Rare earths and pharmaceutical ingredients are exports on which America is heavily dependent. Such drastic measures may have only worked as a one-off and could only hasten China’s efforts to double supply chains elsewhere. They also carry the risk that European leaders such as French President Emmanuel Macron, who has been trying to create a balance structure between the world’s two largest economies, will be drawn into closer cooperation with the US camp. The simplest option is America’s foreign direct investment in China worth more than $120 billion. After all, it’s pretty easy to harass companies like Starbucks or Tesla by preventing them from repatriating money, subjecting them to endless quality control investigations, jailing executives in China with lawsuits, or forcing them to sell assets.