China Is Rapidly Deploying Its Own Export Controls To Prevent The Outflow Of “Capital, Data, Talent, And IP”

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In what is now being dubbed an "unmatched" toolkit among OECD economies, China is rapidly flexing its muscles to prevent the outflow of indigenous capital, tech, and talent, leading to an inevitable bifurcation of the global economy.

There is a popular perception that hardly any innovation takes place within the Chinese economy, that any headway is a result of borrowed or stolen Western tech. While this assertion might have been true for much of China's recent rise as a major economic player, there are increasing signs that it no longer holds true.

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For one, China edged out the US in 2022 to publish the most cited research papers, which is one of the most important characteristics of the quality of a given paper.

As per another measure, which used fractional counting for researchers belonging to different countries, China accounted for 27.2 percent of the most cited papers published in 2018, 2019, and 2020, edging out the United States, which accounted for 24.9 percent of this august cohort.

Now, as per a new report by Merics, it appears that China is rapidly strengthening its own export controls to prevent the outflow of its indigenous capital and IP.

China’s Toolbox Is Unmatched By Any OECD Economy When Monitoring And Limiting Cross-Border Flows Of Capital, Data, Talent, And IP

In response to the Western bloc's export restrictions on China, the Asian giant has, in recent years, implemented its own export control regime on gallium, germanium, and graphite, and restricted the transfer of IP vis-a-vis rare earth magnets, which are used within EV motors and wind turbine generators. Of course, gallium and germanium are critically important metals for the global electronics industry, with China maintaining a monopoly by