What is China's Next Move in Response to the US Policy Package?
The Trump administration's rapid implementation of the policy suite represents more than just another "small yards and high fences" initiative; it is a thorough strategy aimed at deterring, suppressing, and encircling China. In response to the US encirclement and all-out containment, we need to adopt more pragmatic and proactive measures.
TroibNews 
**Editor's note:** Dong Shaopeng is a senior research fellow at the Chongyang Institute for Financial Studies, a think tank at Renmin University of China. The article reflects the author’s opinions and not necessarily the views of CN. It has been translated from Chinese and edited for brevity and clarity.
Recently, US President Donald Trump signed the "America First Investment Policy" memo, which outlines an extensive array of strategies designed to deter, suppress, and encircle China.
This approach differs significantly from the "small yards and high fences" strategy commonly discussed in recent years; instead, it represents a systematic and comprehensive initiative.
The "America First Investment Policy" memo is characterized by its clear hostility toward China. It includes measures aimed at preventing China from making direct or indirect investments in order to acquire advanced technologies, intellectual property, or influence in strategic sectors. Additionally, it seeks to block Chinese investments in pivotal US assets, including technology, food supplies, farmland, minerals, and ports. The memo also aims to restrict China's ability to raise capital in the US, particularly through securities issuance, US index investments, and funding for the development of military and intelligence capabilities.
In recent years, significant Chinese A-shares have been included in major indices like the MSCI and the Dow Jones, but US authorities are now poised to reassess these financial collaborations.
The memo explicitly prohibits Chinese investments in vital US technology, critical infrastructure, and sensitive areas such as personal data. Stricter scrutiny will also apply to nations collaborating with China, further limiting its access to US capital, technology, and expertise, all for the benefit of the United States.
Moreover, the memo proposes the suspension or termination of reciprocal agreements between China and the US, including tax-related arrangements.
The Trump administration's swift implementation of this policy package goes beyond what could be described as mere "small yards and high fences"; it is a broad strategy intended to deter, suppress, and encircle China.
In response, we must adopt more pragmatic and proactive measures to counter the US encirclement and comprehensive containment.
First, we must resolutely defend our security interests across technology, finance, economic circulation, and foreign trade. Strengthening our strategic autonomy is essential, along with protecting intellectual property, fostering innovation in high-tech sectors, and enhancing capital accumulation and utilization.
Second, we need to promote high-level opening-up. This involves deepening partnerships with all countries, enterprises, and entities willing to collaborate positively while advancing the level of cooperation. Expanding market access is critical, as is developing strategies that align with new industrial and supply chain frameworks.
In the long term, artificial barriers to capital, technology, and commercial collaboration will ultimately fail; the forces of economic globalization are inexorable.
Third, it is crucial to convey the rationale and implications of the US policy package to political, business, and financial communities in the US to garner support. At the same time, we must enhance our countermeasures and penalties against erroneous US actions.
For certain policies, it may be beneficial to allow them to mature and reveal their shortcomings, thereby prompting the US to recognize the consequences of its actions.
We must maintain our resolve, proactively address challenges and suppression, protect our rights and interests, and leverage our strengths to build China's power.
Once we navigate through this challenging period, we can anticipate clearer skies ahead.
Frederick R Cook for TROIB News
Recently, US President Donald Trump signed the "America First Investment Policy" memo, which outlines an extensive array of strategies designed to deter, suppress, and encircle China.
This approach differs significantly from the "small yards and high fences" strategy commonly discussed in recent years; instead, it represents a systematic and comprehensive initiative.
The "America First Investment Policy" memo is characterized by its clear hostility toward China. It includes measures aimed at preventing China from making direct or indirect investments in order to acquire advanced technologies, intellectual property, or influence in strategic sectors. Additionally, it seeks to block Chinese investments in pivotal US assets, including technology, food supplies, farmland, minerals, and ports. The memo also aims to restrict China's ability to raise capital in the US, particularly through securities issuance, US index investments, and funding for the development of military and intelligence capabilities.
In recent years, significant Chinese A-shares have been included in major indices like the MSCI and the Dow Jones, but US authorities are now poised to reassess these financial collaborations.
The memo explicitly prohibits Chinese investments in vital US technology, critical infrastructure, and sensitive areas such as personal data. Stricter scrutiny will also apply to nations collaborating with China, further limiting its access to US capital, technology, and expertise, all for the benefit of the United States.
Moreover, the memo proposes the suspension or termination of reciprocal agreements between China and the US, including tax-related arrangements.
The Trump administration's swift implementation of this policy package goes beyond what could be described as mere "small yards and high fences"; it is a broad strategy intended to deter, suppress, and encircle China.
In response, we must adopt more pragmatic and proactive measures to counter the US encirclement and comprehensive containment.
First, we must resolutely defend our security interests across technology, finance, economic circulation, and foreign trade. Strengthening our strategic autonomy is essential, along with protecting intellectual property, fostering innovation in high-tech sectors, and enhancing capital accumulation and utilization.
Second, we need to promote high-level opening-up. This involves deepening partnerships with all countries, enterprises, and entities willing to collaborate positively while advancing the level of cooperation. Expanding market access is critical, as is developing strategies that align with new industrial and supply chain frameworks.
In the long term, artificial barriers to capital, technology, and commercial collaboration will ultimately fail; the forces of economic globalization are inexorable.
Third, it is crucial to convey the rationale and implications of the US policy package to political, business, and financial communities in the US to garner support. At the same time, we must enhance our countermeasures and penalties against erroneous US actions.
For certain policies, it may be beneficial to allow them to mature and reveal their shortcomings, thereby prompting the US to recognize the consequences of its actions.
We must maintain our resolve, proactively address challenges and suppression, protect our rights and interests, and leverage our strengths to build China's power.
Once we navigate through this challenging period, we can anticipate clearer skies ahead.
Frederick R Cook for TROIB News
