Beijing is implementing measures to inhibit the outflow of money, technology, and companies from China. These regulations, announced by the State Council, mandate national security screenings for Chinese companies eager to invest abroad. This comes after rules were established in April, granting authorities the power to disrupt foreign companies relocating supply chains out of China.

Together, these steps indicate a strategy to fortify China’s economic stronghold around its technology and supply chains. This development occurs amidst escalating tensions with Western powers, notably the United States and Europe.

Such rules suggest a shift from the global economic norms of open markets and free trade, which have been pivotal in China’s remarkable economic ascension. Major economies, from Washington to Brussels, are adopting trade barriers over further economic integration. This shift is partly due to fears about China’s global lead in raw materials, manufactured goods, and technology, and the global increase of Chinese products.

“We’ve moved away from a world where laws made it easier to allow the flow of capital, people, technology and trade to go around,” said Ben Kostrzewa, a partner and trade expert at Hogan Lovells in Hong Kong.

The once-envisioned fusion of the Chinese and American economies, known as the ‘Chimerica’ concept, now seems unrealistic.