China has announced plans to respond to Taiwan’s recent decision to blacklist Chinese tech companies, including Huawei Technologies and Semiconductor Manufacturing International Corp. (SMIC).

This action restricts their ability to develop advanced AI technologies.

Spokeswoman for China’s Taiwan affairs office Zhu Fenglian said on June 25, 2025, that Beijing will implement ‘forceful measures’ to protect cross-strait economic exchanges.

However, she did not specify the actions that will be taken.

Last week, Taiwan added Huawei and SMIC to its entity list, aligning with the United States in limiting Chinese tech advancements.

The blacklist requires Taiwanese companies to obtain licenses before engaging in business with these firms. This marks the first time Taiwan has imposed such restrictions on major Chinese companies.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Taiwan’s blacklisting signals a pivotal shift in cross-strait tech relations

Taiwan’s decision to blacklist Chinese tech giants represents a significant evolution in its approach to managing relations with Beijing, which has historically oscillated between openness and restriction.

The island has traditionally navigated a complex balancing act with China, maintaining over US$130 billion in two-way trade while facing military threats from Beijing 1.

Previous policies like the “No Haste” restrictions (1996) and “Active Opening” encouragements (2001) demonstrate Taiwan’s long-standing pattern of adjusting economic boundaries with China based on security considerations 1.

This latest move aligns Taiwan more closely with U.S. technology policies at a time when its semiconductor industry dominates global supply chains, with TSMC alone accounting for over 90% of global advanced chip manufacturing capacity 2.

The timing is particularly significant as it follows years of Taiwan maintaining a careful diplomatic stance while continuing economic engagement with China, suggesting a strategic calculation that the security benefits now outweigh potential economic repercussions.

2️⃣ Taiwan leverages its semiconductor dominance in great power competition

Taiwan’s restrictions on Huawei and SMIC reveal how the island is strategically using its semiconductor manufacturing prowess as geopolitical leverage in US-China technological competition.