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US Chip Export Controls and the China AI Rivalry · history

Version 9

2026-05-26 20:03 UTC · 423 items

What

The US-China AI chip confrontation is defined by three simultaneous dynamics: a Trump administration that approved licensed H200 sales to ten Chinese firms and structured a 15% revenue-sharing deal under which Nvidia and AMD remit a portion of China chip revenues to the US government [4][5][6][7]; a Congress that passed unanimous Senate enforcement legislation [12] and is advancing multiple House bills; and an American technology industry split between Nvidia and AMD lobbying for relaxation [25][28] and Anthropic lobbying Congress for a ban [33]. Huawei is targeting 50–60% of China's AI chip market in 2026 with a projected 60% revenue jump [35][36][37], while SMIC has begun testing domestic DUV lithography equipment — with reports ranging from 28nm [43][44] to 7nm capability [45] — marking a concrete step toward semiconductor manufacturing self-sufficiency. Jensen Huang has publicly stated that blocking Nvidia does not block China from AI — Huawei now fills that role [24].

Why it matters

The 15% revenue-sharing deal treats a national security question as a commercial toll without reducing Chinese AI compute capacity [4][5]. China's domestic semiconductor manufacturing — now including reported DUV lithography testing by SMIC [43][44][45] — is advancing toward a threshold at which US export licensing decisions become structurally irrelevant regardless of their direction. The industry civil war between Anthropic and Nvidia, fought simultaneously in Congress and the White House, makes coherent US policy increasingly difficult to sustain.

Open questions

  • The 15% revenue-sharing deal [4][5][6][7] had not been finalized as of late May 2026 [8] — what are the enforcement mechanisms, and does a revenue tax paid by US firms reduce Chinese AI compute capacity in any meaningful way?

  • The Stop Stealing Our Chips Act passed the Senate unanimously [12] and requires a presidential signature — given the executive's 15% revenue-sharing posture and Nvidia's direct White House access [25], will the president sign legislation targeting companies with which he has active licensing arrangements?

  • SMIC's domestic DUV lithography testing is now confirmed by multiple sources [43][44][45], but reported capability ranges from 28nm to 7nm — which claim is accurate, and at what production threshold does domestic manufacturing capability make US export controls structurally irrelevant?

  • Huang has acknowledged Nvidia 'largely conceded' China's AI chip market [22][23] and that blocking Nvidia does not block China from AI [24] — does this empirical reality change the Congressional calculus on Anthropic's lobbying position [33], or does Amodei's 'selling nuclear weapons' framing [30] hold regardless of market outcomes?

Narrative

The US government's semiconductor export control framework has entered a phase of institutional contradiction between the executive and legislative branches, compounded by a civil war within the American technology industry. The Trump administration reversed Biden-era restrictions by approving licensed H200 chip sales to approximately ten Chinese companies including Alibaba, ByteDance, and Tencent [1][2][3], structuring the deal with a roughly 75,000-unit cap, a 25% tariff, and an arrangement under which Nvidia and AMD remit 15% of their China AI chip sales revenues to the US government [4][5][6][7] — a deal confirmed by multiple sources but not yet finalized as of late May 2026 [8]. The Bureau of Industry and Security adopted a case-by-case review mechanism for H200 and AMD's MI325X chip sales to China [9][10][11]. Congress responded with a multi-front enforcement push: the Senate unanimously passed the Stop Stealing Our Chips Act creating 10–30% whistleblower bounties [12]; the bipartisan MATCH Act was introduced in both chambers [13][14]; Representative Baumgartner introduced a bipartisan chipmaking equipment controls bill [15]; and the House Foreign Affairs Committee held a markup on export control legislation [16][17].

The commercial stakes are quantified and escalating. Nvidia took a $4.5 billion Q1 charge from H20 export restrictions [18][19], with total H20-related charges reaching approximately $5.5 billion [20], and warned of an additional $8 billion Q2 revenue impact [21]. Huang publicly acknowledged Huawei's chips are 'comparable' to the H200, that Nvidia has 'largely conceded' China's AI chip market [22][23], and that blocking Nvidia from China does not mean blocking China from AI — Huawei now serves as a domestic alternative [24]. Huang met directly with Trump to lobby for relief [25] and accepted the 15% revenue-sharing arrangement [4]. AMD CEO Lisa Su confirmed China accounts for approximately 20% of AMD revenue [26], obtained export licenses [27], and warned against strict controls [28]. Opposing them, Anthropic CEO Dario Amodei called Trump's chip reversal 'crazy' [29], compared chip sales to 'selling nuclear weapons' [30], argued semiconductor advantage is 'the only advantage we have' over China [31], published a formal policy argument [32], and conducted a congressional 'Hill blitz' [33] — positioning Anthropic directly against Nvidia and AMD with each side lobbying the branch most receptive.

Huawei's domestic chip program has reached a scale that policy arguments must contend with empirically. Multiple sources project Huawei will capture 50–60% of China's AI chip market in 2026 [34][35], targeting $12 billion in revenue — a 60% year-on-year jump [36][37] — while planning to double Ascend output to 1.6 million dies [38]. The Ascend 910C delivers approximately 60% of Nvidia H100 inference performance [39], and the 950PR is reported to outperform the H20 entirely [40]. ByteDance holds a US H200 license while simultaneously ordering $5.7 billion in Huawei chips [41][2], a dual-supply-chain strategy now structural across Chinese tech [42]. Most significantly, SMIC has confirmed testing of domestic DUV lithography equipment across multiple independent sources [43][44][45] — with reports diverging on the node achieved, ranging from 28nm to 7nm capability — adding concrete milestones to China's trajectory toward semiconductor equipment self-sufficiency, a program already at 35% [46] after US pressure forced Chinese fabs to develop alternative lithography approaches following ASML EUV cutoffs [47]. DeepSeek's architectural innovations have been reframed as a hardware strategy: treating export-control-imposed hardware scarcity as a structural constraint to architect around [48].

The Taiwan arms sale remains paused — Trump made no commitment to defend Taiwan at the Beijing summit [49], Taiwan was not officially notified of the pause [50], a Reuters source contradicted the Iran-war rationale offered by the Acting Navy Secretary [51], and Taiwan is now actively lobbying for the deal to proceed [52].

Timeline

  • 2026-01-20: Anthropic CEO Dario Amodei slams Trump's decision to sell advanced AI chips to China as 'crazy' and publishes a formal policy argument on DeepSeek and export controls. [29][32]
  • 2026-02-10: Axios reports Anthropic CEO conducted a 'Hill blitz' congressional lobbying campaign to boost a China chip ban. [33]
  • 2026-03-27: ByteDance and Alibaba reported planning substantial orders for Huawei's newest AI chip even as US chip access remained restricted. [68]
  • 2026-04-02: Representative Baumgartner introduces a bipartisan bill to tighten US controls on sensitive chipmaking equipment. [15]
  • 2026-04-08: Senators Risch, Ricketts, and Kim introduce the MATCH Act to align multilateral technology controls on hardware. [13][14]
  • 2026-04-15: Reports describe an H200 chip sales structure for China with an approximately 75,000-unit cap and 25% tariff. [1]
  • 2026-04-22: House Foreign Affairs Committee holds a markup on export control legislation protecting American technology. [16][17]
  • 2026-05-14: The US government clears H200 chip sales to approximately ten Chinese companies including Alibaba, ByteDance, and Tencent. [69][2][3]
  • 2026-05-16: Following Beijing talks with Xi, Trump warns Taiwan against formal independence and reportedly makes no commitment to defend the island. [70][49][71][72]
  • 2026-05-21: Jensen Huang tells CNBC Nvidia has 'largely conceded' China's AI chip market to Huawei; US Senate unanimously passes Stop Stealing Our Chips Act (S.1473). [22][23][12][56][57]
  • 2026-05-22: Huang meets directly with Trump; reports emerge of 15% revenue-sharing deal with US government; Acting Navy Secretary confirms Taiwan arms sale paused citing Iran inventory. [25][4][5][55][73][67]
  • 2026-05-23: Reuters source contradicts Iran rationale for Taiwan arms pause; ByteDance confirmed ordering $5.7B in Huawei chips; AMD confirms ~20% China revenue and export licenses; Huawei 950PR reported to outperform H20. [51][41][26][27][40]
  • 2026-05-24: Nvidia reports $4.5B Q1 charge and warns of $8B Q2 revenue hit; BIS shifts to case-by-case H200/MI325X review; 15% deal confirmed not yet finalized; Huawei targeting $12B AI chip revenue with 60% YoY jump. [18][19][21][9][8][74]
  • 2026-05-25: Taiwan urges Trump to advance the paused $14B arms deal; Huawei confirmed planning to double Ascend output to 1.6 million dies; Huang states blocking Nvidia does not block China from AI. [52][38][24]
  • 2026-05-26: Multiple outlets confirm 15% revenue-sharing deal structure; multiple independent sources confirm SMIC testing domestic DUV lithography, with reported capability ranging from 28nm to 7nm; Huawei 60% revenue jump confirmed by FT. [6][54][7][43][44][45][36][37]

Perspectives

Jensen Huang / Nvidia

Controls 'already largely backfired': Nvidia has 'largely conceded' China's AI chip market to Huawei [22][23], and blocking Nvidia from China does not block China from AI [24]. Facing a $4.5B Q1 charge and $8B Q2 revenue warning [18][21], Huang lobbied Trump directly [25] and accepted the 15% revenue-sharing arrangement [4].

Evolution: The explicit framing that 'blocking Nvidia does not mean blocking China from AI' [24] sharpens his prior market-concession acknowledgment into a direct rebuttal of the controls' strategic premise.

[22][23][18][21][25][4][24]

Dario Amodei / Anthropic

Strongly and actively opposed to US chip exports to China: called Trump's reversal 'crazy' [29], compared chip sales to 'selling nuclear weapons' [30], argued chips are 'the only advantage we have' over China [31], and conducted a congressional 'Hill blitz' [33].

Evolution: Consistent. Represents the most prominent AI model company voice directly opposing the semiconductor companies, lobbying Congress while Nvidia and AMD lobby the White House.

[30][32][31][29][33]

AMD / Lisa Su

China accounts for ~20% of AMD revenue [26], AMD holds export licenses [27], and Su warned against strict controls [28] while reporting progress with the US government on easing restrictions [53].

Evolution: Consistent.

[53][28][26][27]

Trump administration / BIS

Approved licensed H200 sales to ten Chinese firms [2][3], adopted BIS case-by-case review for H200 and MI325X [9], and structured a 15% revenue-sharing deal under which Nvidia and AMD remit a portion of China chip sales to the government [4][5][6][7]. Confirmed the Taiwan arms sale pause; the Iran-inventory rationale remains publicly disputed [51].

Evolution: The 15% deal is confirmed by multiple outlets [6][54][7] though finalization remains unconfirmed [8].

[4][5][8][9][55][51][6][7]

US Senate and Congress (bipartisan)

Senate unanimously passed the Stop Stealing Our Chips Act [12]; the bipartisan MATCH Act was introduced in both chambers [13][14]; Baumgartner introduced a chipmaking equipment controls bill [15]; House Foreign Affairs Committee held a markup [16][17].

Evolution: Consistent. Congressional enforcement activity spans both chambers across multiple enforcement vehicles simultaneously.

[12][56][57][16][15][13][17][14]

Huawei / Chinese tech ecosystem (as actors)

Pursuing majority China AI chip market share (50–60% projected for 2026 [35]) with $12B revenue target reflecting at least 60% year-on-year growth [36][37], doubled Ascend output to 1.6 million dies [38], and 950PR outperforming H20 [40]; ByteDance holds H200 licenses while ordering $5.7B in Huawei chips [41].

Evolution: SMIC testing domestic DUV lithography at reported capability from 28nm to 7nm [43][44][45] adds a supply-chain self-sufficiency dimension beyond chip production volume.

[35][36][37][38][40][41][43][44][45]

Taiwan government

President Lai insists Taiwan's future will not be decided by external forces [58]; Taiwan was not officially notified of the arms sale pause [50] and is now actively lobbying for the deal to proceed [59][52] while fearing the pause weakens its defenses [60].

Evolution: Consistent. Active lobbying posture and formal non-notification complaint continue.

[58][50][59][60][52]

CFR / Brookings / IFP (analytical institutions)

CFR: Trump's AI chip policy is 'strategically incoherent and unenforceable' [61], though also argues Huawei cannot catch Nvidia [62]. Brookings: Trump's Taiwan approach is a 'dangerous gamble' [63] and DeepSeek shows the limits of controls [64]. IFP: reopened the fundamental question of whether the US should sell Hopper-class chips to China at all [65][66].

Evolution: CFR's 'Huawei cannot catch Nvidia' claim [62] remains in direct factual tension with Huang's own parity acknowledgment [22] and Huawei's 60% revenue jump trajectory [36].

[61][62][63][64][65][66]

Tensions

  • Dario Amodei / Anthropic vs. Jensen Huang / Nvidia on chip exports: Amodei conducts an active congressional lobbying campaign against chip sales — calling Trump's reversal 'crazy' and comparing it to 'selling nuclear weapons' [30][29][33] — while Huang lobbies the White House for relaxation [25] and AMD's Su obtained export licenses [27], with each side pressing the branch most receptive. [30][29][33][25][27]
  • Trump administration vs. Congress: The White House approved licensed H200 sales and structured a 15% revenue-sharing deal [4][7] while the Senate unanimously passed whistleblower enforcement legislation [12] and the House advances multiple enforcement bills [16][15] — with the same president being lobbied by Nvidia for further relaxation [25]. [4][7][12][16][15][25]
  • Jensen Huang vs. CFR on Huawei chip capability: Huang states Huawei chips are 'comparable' to the H200, that Nvidia has 'largely conceded' China's market [22][23], and that blocking Nvidia does not block China from AI [24], while CFR argues Huawei cannot catch Nvidia [62] — a dispute compounded by Huawei's 60% revenue jump [36][37] and 50–60% market share projections [35]. [22][23][62][24][36][37][35]
  • US export control premise vs. Chinese dual-supply-chain reality: ByteDance holds a US H200 license while ordering $5.7B in Huawei chips [41], SMIC is testing domestic DUV lithography [43][44][45], and Huawei targets 50–60% market share with 1.6 million dies [35][38] — suggesting US export approvals no longer represent meaningful leverage over Chinese AI development. [41][43][44][45][35][38]
  • The 15% revenue-sharing arrangement vs. strategic logic: the deal under which Nvidia and AMD remit 15% of China chip sales to the government [4][5][6][7] generates federal revenue without reducing Chinese AI compute capacity — a structural mismatch that both Amodei's 'national security' framing [30] and CFR's 'strategically incoherent' critique [61] apply to equally. [4][5][6][7][30][61]
  • Acting Navy Secretary vs. Reuters source on Taiwan arms pause rationale: the Acting Navy Secretary stated the pause is due to Iran war inventory constraints [55][67], while a Reuters source directly stated the pause is unrelated to the Iran war [51] — an active credibility dispute, with Taiwan learning of the pause through press reporting rather than official notification [50]. [55][51][67][50]

Sources

  1. [1] Nvidia H200 China Sales: 75K Cap + 25% Tax [April 2026] — reactive:chip-export-china-geopolitics
  2. [2] The US Commerce Department has approved around 10 Chinese ... — reactive:chip-export-china-geopolitics
  3. [3] China gives nod to ByteDance, Alibaba and Tencent to buy Nvidia's ... — reactive:chip-export-china-geopolitics
  4. [4] Nvidia and AMD to pay 15% of China chip sales to US - BBC — reactive:us-china-chip-export-debate
  5. [5] Nvidia, AMD to Give U.S. 15% Cut on AI Chip Sales to China - WSJ — reactive:us-china-chip-export-debate
  6. [6] Inside the U.S. Government’s Bold Revenue-Sharing Deal With Chipmakers Nvidia & AMD - Z2Data — reactive:chip-export-china-geopolitics
  7. [7] U.S. Government to Take Cut of Nvidia and AMD A.I. Chip Sales to ... — reactive:chip-export-china-geopolitics
  8. [8] Nvidia still hasn't finalized deal to kick 15% of H20 China chip sales ... — reactive:us-china-chip-export-debate
  9. [9] BIS Export Policy Shift | Introl Blog — reactive:chip-export-china-geopolitics
  10. [10] BIS's New 2026 License Review Process for AI Chips - Finnegan — reactive:chip-export-china-geopolitics
  11. [11] BIS Revises License Review Policy for Advanced Computing ... — reactive:chip-export-china-geopolitics
  12. [12] Senate Unanimously Passes Stop Stealing Our Chips Act - Digg — reactive:chip-export-china-geopolitics
  13. [13] [2026-04-08] Risch, Ricketts, Kim Introduce MATCH Act; Level the... — reactive:us-china-chip-export-debate
  14. [14] Senators Kim and Ricketts Introduce MATCH Act to Level the Global Playing Field for U.S. Tech - Senator Andy Kim — reactive:us-china-chip-export-debate
  15. [15] Baumgartner Introduces Bipartisan Bill to Tighten Controls on ... — reactive:us-china-chip-export-debate
  16. [16] Support Export Control Legislation at HFAC Markup (April 22) — reactive:us-china-chip-export-debate
  17. [17] House Committee Passes Legislation Protecting American ... — reactive:us-china-chip-export-debate
  18. [18] Nvidia takes $4.5bn hit due to export restrictions | Computer Weekly — reactive:chip-export-china-geopolitics
  19. [19] NVIDIA Posts $4.5B Q1 Charge Over US Export Restrictions — reactive:chip-export-china-geopolitics
  20. [20] Nvidia to record $5.5 billion in charges due to U.S. export ban on its H20 chip for China - MarketWatch — reactive:us-china-chip-export-debate
  21. [21] Nvidia beats on Q1 revenue, warns of $8 billion sales hit in Q2 from ... — reactive:chip-export-china-geopolitics
  22. [22] Nvidia CEO says that Huawei's chip is comparable to Nvidia's H200. : r/LocalLLaMA — reactive:chip-export-china-geopolitics
  23. [23] Nvidia says it has 'largely conceded' China's AI chip market to Huawei — reactive:chip-export-china-geopolitics
  24. [24] Jensen Huang explains how blocking China from Nvidia does not mean blocking China from AI. — Rohan Paul Twitter (2026-05-25)
  25. [25] Nvidia CEO meets with Trump, talks export controls - The Hill — reactive:chip-export-china-geopolitics
  26. [26] AMD CEO Lisa Su says China still accounts for about 20 ... - Reddit — reactive:chip-export-china-geopolitics
  27. [27] #TECH: AMD CEO Lisa Su confirmed Thursday that the ... - Facebook — reactive:chip-export-china-geopolitics
  28. [28] AMD CEO Lisa Su warns against strict U.S. chip controls — reactive:us-china-chip-export-debate
  29. [29] Anthropic boss Dario Amodei slams Trump over 'crazy' decision to ... — reactive:us-china-chip-export-debate
  30. [30] Trump Just Reversed an AI Chip Ban for China—and a Key Tech Leader Says It’s Like ‘Selling Nuclear Weapons’ — reactive:us-china-chip-export-debate
  31. [31] Chips may be 'only advantage we have' over China, Amodei says — reactive:us-china-chip-export-debate
  32. [32] Dario Amodei — On DeepSeek and Export Controls — reactive:us-china-chip-export-debate
  33. [33] Anthropic CEO's Hill blitz boosts China chip ban - Axios — reactive:us-china-chip-export-debate
  34. [34] Huawei to own 50% of Chinese AI chip market by 2026: Report - Huawei Central — reactive:us-china-chip-export-debate
  35. [35] Huawei Is The Biggest Winner In China's AI Market After NVIDIA Pullout, AI Share To Reach 60% This Year — reactive:us-china-chip-export-debate
  36. [36] Huawei expects AI chip revenue to jump at least 60% this year, FT reports — reactive:chip-export-china-geopolitics
  37. [37] Huawei expects AI chip sales to surge at least 60% in 2026: report — reactive:chip-export-china-geopolitics
  38. [38] Huawei to double AI chip output in 2026, targeting 1.6 million dies — reactive:chip-export-china-geopolitics
  39. [39] DeepSeek research suggests Huawei's Ascend 910C delivers 60 ... — reactive:china-ai-rising
  40. [40] Huawei's Ascend 950PR outperforms Nvidia's H20 in China — reactive:chip-export-china-geopolitics
  41. [41] ByteDance to order $5.7 billion Huawei AI chips over Nvidia in 2026 — reactive:chip-export-china-geopolitics
  42. [42] Big Chinese tech firms scramble to secure Huawei AI chips ... - Reddit — reactive:chip-export-china-geopolitics
  43. [43] China Tests Domestic DUV Lithography Machine for 28nm Chips — reactive:chip-export-china-geopolitics
  44. [44] SMIC initiates testing of domestically produced lithography machines to bypass US sanctions — reactive:chip-export-china-geopolitics
  45. [45] China's SMIC Begins Trial Operation of 7nm DUV Equipment ... — reactive:chip-export-china-geopolitics
  46. [46] FinancialContent - China Reaches 35% Semiconductor Equipment Self-Sufficiency Amid Advanced Lithography Breakthroughs — reactive:us-china-chip-export-debate
  47. [47] U.S. pressure has cut China off from ASML's EUV tools, forcing ... — reactive:us-china-chip-export-debate
  48. [48] Great article here on DeepSeek. — Rohan Paul Twitter (2026-05-24)
  49. [49] Trump's "no commitment" on Taiwan post-China redefines strategic ambiguity as a transactional lever. This immediately re... — reactive:chip-export-china-geopolitics (2026-05-16)
  50. [50] Taiwan says US hasn't notified it of any pause in arms sale - AP News — reactive:chip-export-china-geopolitics
  51. [51] US arms sales to Taiwan unrelated to Iran war, source says | Reuters — reactive:chip-export-china-geopolitics
  52. [52] Taiwan urges Trump to advance arms deal after China summit — reactive:chip-export-china-geopolitics
  53. [53] AMD CEO Making Progress with US on China Export Restrictions (Full Interview) — reactive:us-china-chip-export-debate
  54. [54] Nvidia and AMD agree to give U.S. 15% of revenue from ... - YouTube — reactive:chip-export-china-geopolitics
  55. [55] US pausing $14B arms sale to Taiwan due to Iran war: Acting Navy secretary — reactive:chip-export-china-geopolitics
  56. [56] US Senate passes Stop Stealing our Chips Act to curb semiconductor smuggling to China — reactive:chip-export-china-geopolitics (2026-05-23)
  57. [57] RT @AIpolicynetwork: The Senate unanimously passed the Stop Stealing Our Chips Act last night. Thank you @MarkWarner and... — reactive:chip-export-china-geopolitics (2026-05-22)
  58. [58] 🇹🇼 Taiwan's President Lai: 'Future will NOT be decided by external forces' — amid China-US headwinds — reactive:chip-export-china-geopolitics (2026-05-20)
  59. [59] Eager for Arms Deal, Taiwan Stresses Need for U.S. Support — reactive:chip-export-china-geopolitics
  60. [60] Taiwan fears a US pause on a $14bn arms package could ... — reactive:chip-export-china-geopolitics
  61. [61] The New AI Chip Export Policy to China: Strategically Incoherent ... — reactive:us-china-chip-export-debate
  62. [62] China's AI Chip Deficit: Why Huawei Can't Catch Nvidia and U.S. ... — reactive:chip-export-china-geopolitics
  63. [63] Trump's dangerous Taiwan gamble | Brookings — reactive:chip-export-china-geopolitics
  64. [64] DeepSeek shows the limits of US export controls on AI chips | Brookings — reactive:ai-chip-geopolitics
  65. [65] Should the US Sell Hopper Chips to China? | IFP — reactive:chip-export-china-geopolitics
  66. [66] [PDF] Should the US Sell Hopper Chips to China? - IFP.org — reactive:chip-export-china-geopolitics
  67. [67] Acting Navy secretary: Taiwan weapons sales paused to ... - The Hill — reactive:chip-export-china-geopolitics
  68. [68] ByteDance, Alibaba planning to order Huawei's new AI chip - CNBC — reactive:chip-export-china-geopolitics
  69. [69] US clears H200 chip sales to 10 China firms as Nvidia CEO looks for ... — reactive:chip-export-china-geopolitics
  70. [70] Trump warns Taiwan against formal independence after talks with Xi in Beijing. — reactive:chip-export-china-geopolitics (2026-05-16)
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  72. [72] Trump Makes a High Risk Move to Win Over Xi — reactive:chip-export-china-geopolitics
  73. [73] US pauses Taiwan weapons sales to ensure munitions readiness for Iran | Fox News — reactive:chip-export-china-geopolitics
  74. [74] Huawei expects AI chip revenue to jump at least 60% this year, FT reports — reactive:chip-export-china-geopolitics