China Just Found A Massive Loophole To Survive US Sanctions

In recent years, the United States has imposed sanctions on China for various reasons, including human rights abuses, intellectual property theft, and trade disputes. However, China has found a massive loophole that allows it to survive these sanctions. In this blog post, we will explore this loophole and its implications.

The Loophole

The loophole in the US export-control laws allows US technology suppliers to sell to Chinese companies via their subsidiaries. This means that US companies can still sell high-tech goods to Chinese companies that are banned from doing business with the US. The Chinese companies can buy these goods through subsidiaries that are not on the Entity List, which is a list of companies that are barred from exporting to the US.

Implications

This loophole has significant implications for US-China relations. It means that the US sanctions are not as effective as they could be, and China can still access US technology. This could give China an advantage in various industries, including technology, defense, and telecommunications.

Moreover, this loophole could lead to a further escalation of tensions between the US and China. The US may feel that its sanctions are not working and may impose more severe sanctions, which could lead to a trade war between the two countries.

The US-China trade war has also affected the rest of the world, with the tariff increases reducing trade between the US and China. However, the trade war created trade opportunities for other nations and increased overall global trade by 3 percent. US and Chinese policymakers seem determined to reduce the two countries' economic interdependence, built over many decades but now buckling under the weight of their animosities.

The US-China relationship is complex, and the sanctions imposed by the US on China have not been as effective as they could be due to this massive loophole. It remains to be seen how the US will respond to this loophole and whether it will lead to further escalation of tensions between the two countries. It remains to be seen how the US and China will resolve their differences and whether they can find a way to coexist peacefully.