Outwardly, Beijing criticizes the West’s attempts to de-risk and decouple from China. However, if we examine the history of Chinese industrial strategy, we can see that China has been engaged in de-risking for decades. The concept of “two markets, two resources” has guided Beijing’s economic planners since the 1980s. This concept emphasizes the use of both domestic and global markets and resources to accelerate China’s development. Chinese investment in African mines is an example of this strategy in action, as it allows China to acquire valuable mineral assets overseas and combine them with its own processing capacity.
In the 1990s, China further advanced its de-risking efforts by attracting overseas capital, talent, and technology, learning from foreign players, and then venturing out to win global market share. This is particularly evident in the automotive industry, where Chinese EV makers are now expanding abroad after years of joint ventures with foreign companies.
While these concepts may not have been explicitly stated as de-risking, they have effectively embedded China in global supply chains and made foreign countries heavily reliant on Chinese manufacturing and inputs. This dependence gives China significant leverage in managing risks.
In recent years, Beijing’s de-risking efforts have evolved into a drive to develop China’s own technologies and materials to reduce reliance on foreign imports. The Made in China 2025 program, launched in 2015, aimed to make China a dominant player in advanced manufacturing, including semiconductors. This initiative was not only framed as a commercial endeavor but also as a national security strategy.
Furthermore, President Xi Jinping called for the development of technologies in which China has a comparative advantage, allowing China to withhold these technologies to inflict economic pain on others if needed. China’s dominance in the production and processing of heavy rare earths is an example of the leverage it holds over critical minerals.
Overall, China’s de-risking strategy has both offensive and defensive characteristics. It has helped buffer China from targeted technology restrictions and export bans, while also providing Beijing with the ability to flex its economic statecraft muscles. By covering all bases, China has effectively de-risked its economy.
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