US export controls actually helped China iron out tech supply chain 'chokepoints', report finds

A recent report has revealed that US export controls have inadvertently assisted China in overcoming technology supply chain bottlenecks. Over a four-year period, the number of initial public offerings (IPOs) focused on semiconductors has surged, with a significant shift towards China's technology chokepoints. According to data from Morgan Stanley, cited in a South China Morning Post report, around one in five IPOs on Shanghai's Star Market between 2022 and 2026 targeted these critical areas, up from fewer than one in ten in 2022.

This represents a more than doubling of companies addressing foreign technological dependence within a short span of four years.

The chokepoints mainly revolve around the semiconductor supply chain, a sector heavily impacted by US sale bans and restrictions. However, by limiting China's access to certain chips and hardware, the US has inadvertently created an incentive for the country to develop its own alternatives. Of the 21 companies identified by Morgan Stanley in 2026, 19 were closely aligned with the semiconductor supply chain.

Furthermore, the investment banking firm estimates that roughly 60% of companies listing in 2026 contribute to China's supply-chain self-sufficiency, a significant increase from 41% in 2022.

Despite some easing of restrictions over the same period, China has continued to invest heavily in this market, focusing on key areas such as raw materials and manufacturing machinery. The report concludes that even if US technology restrictions were to disappear altogether, China could potentially be in a position where it no longer requires US hardware.