Minimising damage from US' China policy

Containing the fallout of American restrictions on Chinese exports would benefit all parties

The United States’ recent restrictions on Chinese exports and direct investment in China are likely to cause substantial collateral damage to the Chinese economy, raising the risk of conflict. But if China and the US can agree on the concept of a special economic zone (SEZ), such as Hainan Island, the collateral damage and geopolitical risk may be mitigated substantially.

Jake Sullivan, US President Joe Biden’s national security adviser, has likened the US economic restrictions on China to a “small yard with a high fence.” While the administration aims to undermine the Chinese military’s capacity to fight US forces in