Changing Frontiers of Sino-US Technological Competition: From Product Rivalry to Legal Warfare
By Xinger Wei
November 9, 2025
In December 2024, China’s State Administration for Market Regulation (SAMR) launched an antitrust investigation into the US chipmaker Nvidia. The probe centers on allegations that Nvidia failed to honor commitments linked to its 2020 acquisition of the Israeli networking company Mellanox Technologies. By September 2025, SAMR issued preliminary findings indicating that Nvidia had violated China’s anti-monopoly laws, signaling that the investigation would continue. This case, ostensibly commercial in nature, exemplifies how the technological competition between China and the United States has evolved from straightforward product rivalry into a complicated legal struggle.
Legal Battles Replace Traditional Competition
The growing contest between these two global powers is no longer confined to innovation and sales of advanced technology products. Instead, it is increasingly fought through legal mechanisms and regulatory frameworks. In response to Washington’s tightening export controls on cutting-edge semiconductors, Beijing has intensified the use of its own legal instruments to regulate foreign firms. This dynamic marks a shift toward the "legalisation" of the Sino-US technology competition.
At the heart of the SAMR investigation are two principal concerns. First, authorities allege that Nvidia bundled Mellanox’s networking equipment with its GPUs, potentially limiting customers’ ability to purchase competing accelerator products. Second, the launch of Nvidia’s China-specific H20 chips—engineered to comply with US export controls—seems to contradict previous commitments made to provide Chinese clients with fair and non-discriminatory access to Nvidia’s products.
Beyond the specific allegations, the timing and assertiveness of the investigation reflect Beijing’s increasing confidence in the capabilities of its domestic semiconductor industry. Comparative analyses of Nvidia’s flagship product lines suggest that Chinese companies are closing the technology gap, having developed competitive domestic alternatives across multiple fronts.
Symmetrical Responses in a Growing Strategic Rivalry
This investigation must be understood within the broader context of escalating Sino-US technology competition. In 2023 and 2024, the United States augmented its export-control lists multiple times, imposing restrictions on the sale of advanced AI chips—including those manufactured by Nvidia—to Chinese customers. Beijing’s aggressive probe into Nvidia’s Mellanox acquisition is thus far more than a routine anti-monopoly check; it is a carefully calibrated strategic countermeasure.
Rather than relying solely on traditional trade tools such as tariffs, China is deploying its legal regime to regulate foreign firms and safeguard its national technological interests. SAMR’s action illustrates Beijing’s readiness to wield antitrust enforcement in tandem with other regulatory tools such as intensified customs inspections and informal administrative guidance. Reports indicate customs officials have stepped up scrutiny of Nvidia’s H20 chip shipments, while state-owned enterprises have been directed to decelerate procurement of foreign GPUs and prioritize the testing of domestic substitutes.
Industrial Policy and Semiconductor Self-Sufficiency
China’s approach transforms legal and regulatory enforcement into an instrument of industrial policy. The government is pushing the goal of semiconductor supply-chain self-sufficiency to the forefront of national strategy. This involves steering procurement policies and subsidies towards domestic GPU manufacturers, including established players like Huawei’s Ascend line and emerging startups such as Cambricon.
This strategic turn coincides with shifts in the global semiconductor supply chain. While the US continues to grapple with structural production vulnerabilities—heavily depending on Asian contract manufacturers such as Taiwan’s TSMC for advanced chip fabrication—Chinese chipmakers have progressed in closing their technical capability gaps. Backed by robust political support, Beijing is emboldened to leverage its regulatory framework proactively, transforming legal enforcement from a purely defensive tool into a competitive weapon.
The Broader Legal Tug-of-War and Global Implications
Both China and the United States now strategically invoke legal rationales to justify restrictive measures. The US frequently cites “national security” concerns to legitimize its export bans and flexible licensing protocols, whereas China appeals to principles of “fair competition” in justifying its anti-monopoly investigations. This rhetorical symmetry conceals an ongoing contest over who controls the governance rules of the international technology sector.
These regulatory confrontations have repercussions beyond Sino-US relations, posing significant challenges for third-party nations and multinational corporations. Navigating divergent and increasingly fragmented compliance regimes—ranging from export controls to antitrust regulations—incurs rising costs and legal uncertainties. Moreover, established multilateral forums, including the World Trade Organization, face difficulties mediating bilateral legal disputes. As China and the US deepen parallel legal frameworks governing advanced technologies, global governance risks splintering into a dual-system equilibrium.
Escalation in October 2025 and the Path Ahead
The legal contest intensified in October 2025. On October 9, China’s Ministry of Commerce imposed new export controls requiring licenses for rare-earth-based materials, semiconductor technologies, and superhard materials. Notably, for the first time, these controls incorporated an extraterritorial “50% rule,” under which foreign companies with at least 50 percent ownership by listed Chinese entities are presumed ineligible for licenses. The following day, former US President Donald Trump announced plans on social media to levy a 100 percent additional tariff on all Chinese imports starting November 1, in retaliation for China’s rare-earth export restrictions.
These rapid and reciprocal legal and economic measures from both governments underscore the evolving use of legal frameworks as tools to gain strategic leverage across multiple sectors.
Multinational Firms Caught in a Geopolitical Crossfire
Major technology companies now find themselves entangled in this geopolitical rivalry, operating not just as market competitors but as policy agents aligned with national strategies. For the United States, tech giants drive technological outreach and global influence. Conversely, in China, these same firms become focal points through which the state asserts regulatory sovereignty and institutional confidence. This dual role imposes increasingly geopolitical constraints on corporate decisions.
As Beijing seeks to assert authority in the “battle of rules,” the future competition will extend beyond who builds the most powerful chips. It will hinge on who establishes and enforces the operational rules governing these technologies’ use and exchange worldwide. For companies and policymakers around the globe, this emergence of legal-technological rivalry represents a critical institutional transformation demanding close attention and strategic adaptation.
This article was originally published on November 9, 2025.
