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In a dramatic policy reversal, the U.S. government, under Donald Trump,
China’s hesitation makes sense in the context of a broader industrial strategy. For years, Beijing has pushed for semiconductor self-sufficiency, encouraging domestic production and discouraging reliance on foreign hardware.
The arrival of U.S. export controls on AI chips had, in many ways, accelerated that drive. Now, with the H200 potentially back on the table, the logic of “import advanced chips” clashes with long-term strategic goals.
According to recent reporting, Chinese firms that might want H200 chips, including major cloud providers, could face a lengthy approval process.
They may have to justify why domestic chips are insufficient for their needs. Public-sector buyers may be barred altogether. Even private firms may be forced into strictly controlled, selective adoption.
That dynamic undercuts the business case for broad H200 importation. Add to that the steep cost: the 25% U.S. surcharge makes the chips pricier and thus less attractive, especially compared with investing instead in locally developed alternatives.
From Washington’s perspective, the export approval looks like a pragmatic compromise.
By reopening sales of powerful chips, albeit under tight conditions and with a hefty revenue cut for the U.S., the move shifts the strategy from blunt bans to a more nuanced model balancing economic and security interests.
For Nvidia, the decision revives a potential route to recapture part of China’s previously lucrative AI-hardware market. But the road from approval to deployment is fraught with uncertainty, at least for the near term.
For China, the logic of domestic self-reliance, political optics, and technology sovereignty may outweigh the operational benefits of adopting H200 chips, at least until local chips catch up. In that sense, Beijing’s likely restrictions may render Washington’s export liberalisation largely symbolic.
In strategic terms, this tug of war could mark a turning point: rather than China being dependent on U.S. chips, this episode may accelerate its push to build homegrown alternatives, transforming what had been a market dynamic into a competition for technological autonomy.