Since the beginning of the Ukraine war, the ineffectiveness of Western sanctions on Russia has become increasingly clear. The same is true of US sanctions against China — especially the Biden’s administration’s ban on high-performance semiconductors and, more recently, on graphics processing units (GPUs). The foreign policy community, illiterate in matters of economics and finance, massively overestimated the effect such sanctions would have, as the measures rely on the idea that China’s rise is based entirely on US technology.
The response to Chinese AI company DeepSeek and its destabilisation of US tech stocks in recent days demonstrates how this strategy has backfired. Advocates for sanctions still argue that they will have an effect, if only we wait long enough. Yet the very opposite is true. The longer that sanctions are applied, the more likely it is that countries will find ways to circumvent them — or in the case of DeepSeek, simply outsmart them.
Since at least the turn of the millennium, Beijing has been crowding in on the so-called Stem subjects (science, technology, engineering and mathematics), with American and British universities particularly popular among Chinese students. China has its own highly competitive university sector that is also heavily focused on these subjects — media studies seems to be of lesser interest.
The West maintains a few inherited advantages. Patented proprietary technologies exist to protect. But as the car industry has now found out, this works until it doesn’t. China was previously ineffective at producing semiconductors, as recounted by Chris Miller in his book Chip Wars. But this was only a snapshot, rather than a detail from which to extrapolate. Since the various restrictions imposed by the US on ASML, Europe’s most important tech company, China has been improving its production capacity. With talent, money and natural resources, why wouldn’t the country succeed eventually?
Sanctions are not only failing to accomplish their task: they are actively counterproductive. DeepSeek, as a product of a sanctions regime, needed to develop its own system — and choose a route that was more efficient and less costly than the one taken by the US. It is the unintended side effects of sanctions which should concern us. They caused economic shifts in Western countries for which those governments were unprepared. The Russia sanctions were a factor in the deindustrialisation of Germany and, by undermining Olaf Scholz’s governing coalition, in the rise of the AfD.
Perhaps the most disastrous geopolitical effect, though, is that they pulled China and Russia into a new anti-Western strategic alliance. America and Europe must now reckon with a coming multipolar order, in which global influence is spread more evenly beyond the old powers. The game, it would appear, is over.
This is an edited version of an article which originally appeared in the Eurointelligence newsletter.
Join the discussion
Join like minded readers that support our journalism by becoming a paid subscriber
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.
Subscribe“They caused economic shifts in Western countries for which those governments were unprepared. The Russia sanctions were a factor in the deindustrialisation of Germany and, by undermining Olaf Scholz’s governing coalition, in the rise of the AfD.”
or the destabilisation of Europe through these means and mandated mass migration, bombing of pipelines etc is the end in itself to stop a rival power block from developing
correct but would add Eu comission overrule, net zero as MAIN reason why there has been zero growht in euro zone for past 17 years ! All self harm in favor of very few.
It seems to me that self-inflicted damage was much more effective tool:
Never attribute to malice that which is adequately explained by stupidity.
In terms of accelerating the progress of technology then perhaps sanctions are a good thing. They force imagination. It sounds similar to a war situation, in which enemies have to develop technology with what they have, because they cannot simply buy it from their enemies.
Sometimes UnHerd contributor Edward Luttwak wrote a fascinating book on this called The Art of Military Innovation: Lessons from the Israel Defense Forces. Although the October 7, 2023 attack by Hamas showed how Hamas may have learned more lessons on innovation recently, the Israel defense forces have arguably despite their small size long been the most innovative military in the world.
Ironic as it seems, constraints tend to stimulate creativity rather than inhibit it. Those who are not forced to focus by constraints tend to get lazy and stay in the ruts they have been traveling in, and when they do try things, get too creative with unworkable solutions.
There is an interesting report in today’s press that if you ask DeepSeek about Tiananmen Square or Taiwan it refuses to answer! Draw your own conclusions.
My guess is one could find political (in its broadest sense) biases in all AI. It’s all reliant on human design and input. Do Western versions allow deep searches for, for instance, the best way to manufacture a poison that only affects one sex or racial heritage? I doubt it. Systems are designed with at least some safeguards; the CCP keeps people safely ignorant of massacres in its capital city.
Whilst our current, and recent, government kept the UK population safely ignorant of the Pakistani gang rapes of vulnerable white girls occurring in cities across the UK.
We no longer have any moral highground.
Slightly different but relevant regarding how AI can be “censored” in regards to its responses.
I recently had a “conversation” wirh ChatGPT in respect of how I could build an AI engine which would run on an Intel i5 laptop with voice recognition and speech output.
The AI was incredibly helpful, it suggested various readily available engines which are available, datasets which could be accessed to train the AI at increasing levels of size and complexity as the AI developed. Additional modules and addins which would increase the speed and accuracy of the “home brew” AI.
It then offered to write all the code required and compile it into a single executable file which I could download.
It almost seemed to be excited by the task as it kept adding suggestions and potential expansions.
When I logged back in a few hours later the whole conversation was gone.
Everything prior to it and after it was still there but that specific interaction had vanished.
I tried asking exactly the same (word for word) questions but only got back generic answers.
Looks like it’s not just China
Don’t forget that Microsoft’s Encarta encyclopedia would provide different answers according to local PC. So on Kashmir it would provide the Pakistani version to Pakistanis and the Indian version to Indians. That may have been where the corruption of the news media began.
Isn’t it time for ‘analysts’ to stop saying:
It’s here, and has been for some time now. It looks like the US is now fully cognisant of this under Trump; as for Europe, the myopia is never so evident as by the reflection in Starmer’s specs.
My thoughts exactly
Wow, expanding the number of courses at Western universities on things like David Beckham and Gender Studies and allowing universities to become a hive of masturbatory hysterics over formerly mainstream views and incorrectly applied pronouns was a strategically suicidal move.
Who’d have thought it?
Once more a reasonable article but as always the Author as 99.9 % of
Western Elite , Powerful, Politicians , Journalists and the Chattering classes Utterly fail to even possess
A smidgen and understanding of China
As such almost every single policy decision made against China is destined to seriously back fire against those decisions
So without going into too much detail and having studied China assiduously for 55 yrs
Here’s a synopsis of why
China is a Civilisation over 5000 yrs old and the basics and fundamentals are basically the same today ( adapted for the New Modern Era – I’ve little doubt that those who read this singularly fail to comprehend of what I speak )
USA less than 300 yrs old
Colonialism 500 yrs old
Neo Liberal Capitalism 40 yrs old
Grasp the above you now beginning to understand what’s taking place in ‘ The New Modern Era ‘
Big clues for you China is merely adapting in a correct manner
As it always has by way of a Socialist Capitalist Economy
Go find out what the 5 yellow stars represent on China’s National Flag
If you do then it yields tremendous
Insight into not only where China is today but more importantly it’s destination which has earth shattering consequences for Western Society
Now in order to have a deep understanding of China and only after serious study of their 5000 yr old history
You MUST then go on to study
Buddhism, Zen Buddhism and Confuciousism
Why because the principles of all three are firmly embedded into
The governance of China that’s why
And if you overcome and embrace all of I speak off with regards the Knowledge and wisdom
Then in order to Comprehend China of today you have to a avail
Yourselves of the Five volumes of
President Xi Jinping in The Governance of China
Now the biggest clue of all
Study ‘ The Art of War ‘ a 5th century 13 chapter writing by a ancient Chinese military strategist
Sun Tzu ( Master Sun )
But unfortunately Western experts not only make minor but very
profound Translation errors but also draw the wrong conclusions
The writings are actually The Art of Peace
However for Westerners the 1 St golden rule of War in Sun Tzu writings is
Know thy Foe ( including yourself )
And all in the West are most certainly failing to apply this Golden Rule ( Think Afghanistan)
His writings conclude with this
‘ Tis the most cleverest of Warriors who wins by merely placing his hand upon his Sword ‘
If by some miracle you’ve not only got this far but grasped with a open mind , Then you have a very rudimentary understanding of the implications of Deep Seek as to how it arose and the amplifying consequences that shall unfold to Western Capitalism
Now let’s explain how all this arose
And as a inevitable result of the Utter stupidity of Western measures in a vain attempt.to.contain , encircle , control and colonise China politically , economically and Militarily
China is a peaceful Nation and always has been so
To China ( go read Confucious)
Unity , History ,Respect , Honour ,
Humility and above all proper governance is firmly embedded into all Chinese actions ( words mean nothing in China tis your actions that you Judged upon )
Now judge Trump and his ” We gonna build a Wall ‘ and just how far it’s got in 8 years
Think China’s Great Wall designed, constructed and fully functional in 6 years
So how did Deep Seek manage to Jump out of nowhere upon you
Go back read all I speak of
Here’s how
Chinese unity , socialist capitalism
And it’s good governance by way of
President Xi Jinping,s guidance
Upon imposition of Western
sanctions marshalled China,s resources and instructed that in a spirit of Unity all work together without fear in order not only overcome Western sanctions but
Surpass the West in advancement
Literally at a drop of the hat
Chinese Business , Educational institution,s etc forgave their competitive ways with each other
Joined hands and now openly share their knowledge and capabilities
The results of which now stare you in the face
Let’s conclude as to all matters
Because all I write hear pertains
To where the future lies
All brought about and given Birth too
When President Obama reconfigured US military to encircle China who knew what the game
really was
Then you engineer Ukraine Back
then Sanction Russia seizing dollar assets and using to fund one of the most corrupt regimes in the World
Hence the Cast Iron Friendship of China and Russia
But more importantly the rapid expansion of BRI now 127 nations participating and BRICS of which in January alone Indonesia and Nigeria joined and a growing Queue of Applicants including Turkey , Saudi Arabia and Vietnam
Here’s a extract of President’s Xi Jinping address to the Chinese nation upon the 75 th anniversary of the formation of The People’s Republic of China
The days of Colonialists interfering
In the Internal affairs of China are finished forever and any of those who think otherwise and cross our
Red line in the South China Sea
Shall merely discover that China has built a 2 Nd Great Wall by way of the Ingenuity and hard work of it’s people in the creation of it’s advanced technology , Manufacturing and Defence Industries
So any who are stupid enough to breach our 2 Nd Great Wall
Shall merely discover that their heads shall be smashed against this wall
This my dear fellow is the Art of War ( peace)
And Xi simply placing his hand upon the Sword
Not for one second is this a Act of Aggression
Why because Xi also stated this
China openly extends the hand of friendship and cooperation
In order to create a New Civilisation which is Required in order not only for Humanity to overcome the Profound problems we now confront but to thrive and prosper. Moderately so
This new Civilisation is one that is referred too as one that’s
Eco , Environmentally and Sustainable all in order to restore the proper balance and Harmony between Man and Nature
Those that refuse the hand of friendship and cooperation
Shall merely be left behind only to wither and die
Hope this enlightens you by even the tiniest of bits
But more importantly prizes opens your minds
If not so then your future s one of a slow withering end
All very nice and reasonable. But China plays the long game – something the west has forgotten how to do in its frantic two-year cycle of elections. And the key is in the relative intentions. The USA’s constant manoeuvres to further its world domination don’t just alienate China and Russia. But is China merely seeking to counter US hegemony, or does it have plans for its own global hegemony?
Its extremely aggressive behaviour in the South China Sea, its constant threats to other nations – especially Taiwan – its fishing fleets sweeping the oceans of anything edible (operating in packs to confront foreigners in their own local waters), its constant testing of the border with India… these are not the actions of a country that wants friendly peaceful relations. And then there’s the internal repression under a one-party totalitarian system. That is not a governance model that attracts friendship.
I would be delighted to see China and Russia join the global community. It is a fascinating country with enormous potential. But we are still such a long way from such understanding. But since trump is a deal maker, let’s hope he pursues the path of mutual understanding that is the only way to make the world a safer, healthier place.
Brian Doyle Chen
“I have little doubt that those who” write like this are off in some la-la-land all their own. Do you really believe that you’re the only one who can see what’s right in front of them?
Many years ago, when China was still considered a third-world country, a Chinese immigrant friend told me that the Chinese, all of them, feel vastly superior to the people of the West. And that they intend to arrive at their rightful place at the top of the heap in their own way and in their own time.
He laughed at my incredulity. He said they didn’t have to hustle us in anyway; we would lay our own the trap and walk right into it, all by ourselves. Forty years later his words ring more true every day.
I, for one, did not need your ersatz enlightenment.
“The Russia sanctions were a factor in the deindustrialisation of Germany and, by undermining Olaf Scholz’s governing coalition, in the rise of the AfD”
.
This means that Olaf Scholz’s coalition is as innocent as a virgin, am I right?
Sanctions can only work effectively if they are enforced. Please note: ..forced, that is, the use of force, violence, actual physical response to sanction breakers, ships confiscated or sunk, planes siezed or downed, smugglers imprisoned or shot, etc.
I won’t argue for or against sanctions, but it seems silly to me to suggest China will only innovate if pushed to do so by sanctions. European Deindustrialization stated long before natural gas sanctions.
Indeed, the author comments that “Beijing has been crowding in on the so-called Stem subjects (science, technology, engineering and mathematics)”. But then they are bound to fail compared to the west because diversity is our strength. How many DEI departments can China boast?
It began with the shifting of production to countries with little or no labour or environmental regulation. The West thought it could keep going on clean industries, office work, the financial sector, tourism and entertainment. The pandemic burst that bubble, by showing the importance of reliable supply networks, particularly for strategically important products (a lesson the UK had learned during WWII but proceeded to forget over the ensuing generations).
All the while we literally have the son of a KGB agent in the HoL I think we can guess the extent to which our enemies take sanctions seriously.
Spot on. Sanctions are cowardly too. In the same league as starving your opponents into submission.
A time honoured technique. Lawfare is the sophisticated modern version.
Prediction of next set of narrative: China is risk to national security and drums of war! Never admit defeat. Always create chaos!
With China’s emphasis on artificial intelligence and electric cars, we emphasize social media and ban TikTok as though that were some kind of threat. China is not a foreign adversary, but a foreign competitor, and we should be a lot smarter in how we deal with the competition. Far better to figure out a win-win than to fight a zero-sum or even negative-sum game.
I agree with the last part. But I think you are generous regarding ‘competitor’. A competitor plays by the accepted rules and does not seek a monopoly position. If all parties are willing to accept the ‘live and let live’ position then some sort of accommodation may be found. But China’s price may be unfettered domination of Asia, which would be disastrous for Japan, Taiwan and Singapore and a threat to India.
Depends if you believe that China actually did this for a tiny fraction of the cost and without the aid of high end chips they either stockpiled or smuggled into the country.
I would say it’s more likely that China is once again using its tried and tested play book of lying about costs and using heavily subsidised products to drive competitors out of business before forming monopolies in strategically important industries.
Not bothered about the development cost, but if it’s matching current Western models for a quarter of the runtime costs, that’s impressive. Can’t possibly risk using it given the source, but it’s an impressive feat nonetheless.
China is using the capitalist system to undermine the west, unrestrained by western regulations and socialist (fair play) ideals.
You know what I find most hilarious? In the West, people readily accept subsidies for billionaires to run their businesses, but they reject subsidies from the government to serve the people. It’s fascinating to watch.
You’ll often hear people say, “No, China is bad because the government subsidizes industries.” yes, China subsidizes technology and ensures equal job opportunities for its people. But who subsidizes technology in the West? The government does—but instead of benefiting the people, the subsidies go to billionaires.
Subsidies are going to happen anyway; it’s time to move past the debate of state versus business. The person who controls a country’s power is the one who controls its weapons. If the state controls the weapons and chooses to subsidize technology for the people, I’d much rather have that than watch the government give all the money to a single billionaire and “hope”that billionaire acts in the public’s best interest.
This idea—that a billionaire will magically create jobs and distribute wealth fairly—is completely delusional. The government will spend money one way or another. I’d rather see it spent on hiring 10 people directly than handing everything to one billionaire in the vague hope that they might hire 10 people—which they often don’t.
These are just practical examples, not absolute truths, but they illustrate the fundamental issue. If the state is going to invest in something, would you rather have the money go to a billionaire or back to the people? This is the real question at the heart of the debate.
The American dream is you may be that billionaire but reality is painfully demonstrated otherwise!
You confuse legitimate tax breaks or reliefs, which are given to viable businesses to help assist with smoothing out challenges in the business cycle, such as oil companies which get tax relief on decommissioning and exploration. You forgo short term tax revenues to enable long term stable tax revenues. It’s good economic sense and benefits everyone in the long run.
What China is doing is selling products at a loss and making up the difference with direct tax transfers to the business. They do this to drive competition out of business so as to create monopolies in strategic industries. By the way, a big part of this is artificial suppressing wages in China to achieve this. Consumption by Chinese workers is way below what I should be as their prosperity is being sacrificed for the strategic goals of the Communist Party. We’ve seen how that economic model works out before.
We are comparing a 6,000-year-old civilization to one that’s barely 700 years old. These two cannot be compared in the same way. China has experimented with capitalism, socialism, and communism, and after centuries of adaptation, they have arrived at their current model—one that is now putting the West out of business.
We can’t afford to get lost in abstract concepts and ideological debates when the material reality is clear. In the end, even in the West, if you look at major businesses like Google, Meta, and Microsoft, you’ll find that they are ultimately owned by the same small group of people. The issue isn’t about preventing a select few from controlling industries—that has always been the case. The real question is: what is the endgame?
For the West, the endgame is profit—maximizing returns at any cost. In contrast, China has realized that profit alone doesn’t work, and a race to the bottom is unsustainable. Their strategy is working, and it’s pushing us out of the market. So instead of getting stuck in ideological debates, we should be asking: given this reality, what is the right course of action? Because endless arguments about ideas and concepts are exactly what led us to this crisis in the first place.
Chinas demographics are in collapse, it is massively reliant commodity imports, it has to steal the majority of its technological innovations, is only able to compete by engaging in illegal protectionist business practices and by exploiting its work force, who’s wages its viciously suppresses along with their basic freedoms and has wiped out much of their savings in its gargantuan property market collapse.
That is the reality of China’s one party state you so admire.
The sanctions on Russia have had an effect. It has turned Russia with all its natural resources into a Chinese satellite state.
I didn’t think of it this way, but the author is right! So, the whole old model seems to have failed at every point. The sanctions didn’t work with either Russia or China, and they actually lost the US the global South. They beat us. Diplomacy, mutually beneficial trade and cooperation beat the old school yard bully, narrative control NGO manipulation model. It seems obvious at this point. For European leaders, they’re still stuck on stupid. Pretending like continuing to self-harm because those sanctions against Russia are hurting them way worse would be comical if it were not so sad. Of course, add the slowness to recognize and change course from the terrible immigration and the green energy policies and nationally we have what has been known as a Darwin Award, happening in slow motion.
I think what happened is they got so used to being controlled by the greater globalist agendas, and having narrative control in place the politicians were just figure-heads, the face of what they considered an unstoppable movement. Only it failed, and they have no ideas, because they aren’t real leaders, they’re just propped up products, just pretend actors. Only now with the populist movements there are real leaders with real common sense ideas, and so holding on to the old ideas is sort of like Ukraine holding on to the last man. No one expects them to win, but delaying it all as long as possible is the only plan.
The EU is run by the unelected Commission, which continues to pursue its dream of a USofE, with nations reduced to mere member states and all real power administered from Brussels (aided and abetted by Strasbourg, the Hague and Frankfurt). But given the evidence that the world is nowhere near ready for global union (too many conflicting interests), the west is retreating into nationalism (and far more worryingly – tribalism).
Not sure what all the fuss is about. After using it for a week. From what I can tell, Deep Seek for 99% of the population is basically an advanced search engine or search engine optimisation tool. I can see that it is roughly on par with packages such as Chat GPT. The real advances are for developers who can piggyback on the open source code and target particular applications. Good to hear from anybody who has used it for anything other than what chat GPT and BARD are currently used for.