#competitiveness-vs-us-china

#competitiveness-vs-us-china

"First of all, the Chinese have huge direct support for their auto companies. They have enough capacity in China to cover all the manufacturing, all the vehicle sales in the United States."

China's exports have decelerated as the Iran war starts to affect global demand and supply chains, according to Gary Ng, a senior economist for Asia Pacific at French bank Natixis.

In recent weeks, China approved the world's first commercial brain-computer interface medical device and unveiled a five-ton class electric vertical takeoff and landing aircraft that has already completed a public flight.

Nvidia's Q3 FY2026 earnings call revealed China data center revenue grew sequentially on "export-compliant copper products," but CFO Colette Kress noted it "remains well below levels prior to the onset of export controls." Nvidia has been selling export-compliant chips to China for two years, and China previously represented 20-30% of revenue share. NVDA is up 0.77% over the past week while Advanced Micro Devices ( NASDAQ:AMD) surged 12%. Nvidia's stock has shown limited movement following the news, while AMD has captured significant momentum.

President Trump hates the United States' trade deficit. Indeed, he is so concerned about the "economic and national security risks" the deficit creates that he imposed a tariff regime that raised geopolitical tensions across the globe.The only problem is that his tariffs don't appear to be rebalancing the huge volume of goods and services the U.S. imports, versus its declining exports.

Instead of paralyzing China's AI sector, these controls have promoted domestic self-reliance. With no choice but to develop indigenous workarounds and architectural innovations, Chinese businesses are decoupling AI progress from sheer hardware volume. U.S. policies have undoubtedly bought time, but they have also ushered in a parallel innovation ecosystem totally independent of Western influence.

U.S. regulators have allegedly drafted rules that would require U.S. government approval to ship AI chips anywhere outside the U.S., according to Bloomberg, citing sources. This would give the U.S. significantly more control over companies like AMD and Nvidia.