The US wants China to become technologically independent. That’s why they are restricting foreign components into China because they want China to develop their own native technology through Huawei.
This is also why only Huawei is specifically targeted in US sanctions while its domestic competitors like vivo, realme etc. are allowed to export unchecked. The result is that Huawei displaces all its domestic competitors within China, but the other companies are now also taking over Huawei’s share in the global market.
The US knows it cannot compete with China technologically, but it can use its control of global market to damage China’s economy as long as China continues to stay as a net exporter country. The vast majority of the businesses around the world are too deeply tied to the US controlled infrastructures like Amazon/Google and the US is going to make it extremely costly for them to want to switch to the new Chinese ecosystem, no matter how much better the Chinese technology is. Few is going to want to replace their entire infrastructures that they have been operating for years, and losing the ability to conduct business with their regular customers and suppliers. Far too risky for any capitalist to do that.
The US is a landlord empire and will always behave like a landlord. Remember that. China’s only way out is to give up its net exporter role and transition into a domestic consumption model.
On the contrary, America cannot possibly compete with China on industrial and technological terms. Its best bet is to control China’s growth through global trade.
This is possible because China relies heavily on export revenues. We know this because China’s annual budget deficits have been kept below 3% for the past decade except for 2 years. This means that the vast majority of Chinese budget came from exports and credit, not fresh central bank money creation.
What this also means is that if you can block countries, say businesses from Southeast Asia or other parts of the world, from using native Chinese technology on the grounds that they are technically incompatible with Western made ones, and make it extremely costly for them to switch, then China’s exports will fall, and together with it investment in their own technology. Countries will literally have to choose between doing businesses with China at the expense of losing US and EU customers, which they have served for decades.
This is what “decoupling” means, and it is actively pursued by the US. As I said, this is the landlord strategy. Do you really think Microsoft came to prominence because it made the best products? No, it relied heavily on legal and financial means to bully their competitors out of the scene.
This is why China’s best bet is to become self-sufficient, and to do that it needs to stop being a net exporter country.