China is preparing to make a decision that sounds paradoxical: restricting access by its own technology companies to the world's most advanced chip manufacturers. According to xataka.com, China's Ministry of Commerce has begun consultations with giants like Huawei, Alibaba and ByteDance on a new regulatory package aimed at shielding the artificial intelligence race within its borders, even if it means sacrificing some of its technology champions.

The plan: closing the door to TSMC and Samsung

The most radical proposal in the package is banning Chinese chip designers from turning to foreign manufacturers like TSMC (Taiwan) or Samsung (South Korea) to produce their integrated circuits. This would directly affect companies that today depend on these production plants to varying degrees to turn their designs into reality.

The problem is obvious: Chinese semiconductor factories—especially SMIC—are not yet prepared to handle all that demand, nor do they master the most cutting-edge technological nodes where the global industry competes. Forcing these companies to manufacture domestically would mean slowing their innovation or settling for less advanced technology than the competition.

Beyond chips: data and models in quarantine

But the battle for technological sovereignty is not limited to hardware. The package would also include severe restrictions on the export of advanced AI models and strict controls over training data that Chinese companies could take out of the country.

This measure represents a shift from the strategy of companies like DeepSeek, which until now have bet on openly releasing the weights of their models as part of their low-cost offensive against Western AI. If the restriction is confirmed, that business model based on transparency and global access would be compromised.

Closing the gates on strategic acquisitions

The regulatory package would also tighten rules on foreign acquisitions of technology deemed strategic, especially in agentic AI. Beijing is trying to close what it sees as a legal loophole: the same one that allowed Meta to buy start-up Manus for 2 billion dollars, an operation that Chinese authorities subsequently ordered undone.

When does it take effect? Still unclear

For now, all these proposals are in the consultation phase. None of the companies mentioned nor China's Ministry of Commerce itself has confirmed the final scope of these measures, or when they could be formally incorporated into legislation.

If approved, they would likely form part of the next review of China's catalogue of technologies banned or restricted for export, the same instrument that already controls critical products like rare earths and lithium.

A sovereignty that could come at a price

The irony is that China seeks to strengthen its technological independence by penalising its own champions. By cutting access to the world's best factories, Huawei, Alibaba and ByteDance would be tied to insufficient domestic capacity or forced to accept a technological lag behind American and European competitors who can access the best of the global market.

It is the classic dilemma of isolation: the more you close the doors seeking to protect what is yours, the greater the risk you fall behind. Will China be able to develop its internal ecosystem fast enough that the strategy does not prove costly for its companies?