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

US Export Controls Helped China Address Tech Supply Chain 'Chokepoints'

New data from Morgan Stanley, cited in a South China Morning Post report, suggests that US export controls have inadvertently helped Chinese companies fill critical gaps in the domestic technology supply chain.

The analysis covered 229 IPOs on Shanghai's Star Market between 2022 and 2026, revealing a significant shift in the types of companies reaching China's public markets.

Growth in 'Chokepoint' Companies

The number of companies targeting China's technological 'chokepoints' has grown substantially over the four-year period:

• In 2026, around 1 in 5 IPOs fell into the chokepoints category.
• In 2022, fewer than 1 in 10 IPOs were in this category.
• This means the number of companies addressing areas of foreign technological dependence has more than doubled in four years.

Semiconductor Supply Chain Focus

The so-called chokepoints have concentrated around the semiconductor supply chain, driven by US restrictions and sale bans on certain chips and hardware.

Morgan Stanley identified the following specifics for 2026:

• 21 companies were specifically targeting these shortfall areas.
• 19 of them were closely aligned with the semiconductor supply chain.

Supply-Chain Self-Sufficiency Drive

Morgan Stanley estimated that the proportion of companies contributing to China's supply-chain self-sufficiency effort has risen sharply:

• 2026: around 60% of listing companies contribute to self-sufficiency.
• 2022: around 41% of listing companies contributed.

Continued Investment Despite Eased Restrictions

While some restrictions have been eased during this period, China continues to invest heavily in the market, with continued investments across key remaining areas such as:

• Raw materials
• Manufacturing machinery

The report suggests that years of US technology restrictions have increasingly pushed Chinese startups toward replacing foreign technology. Even if restrictions were to stop overnight, China could now be in a position where it may not need US hardware anymore.