2. You seem to assume the bulk of innovation is going to be happening outside China and that blocking consumer access to Western platforms would somehow inhibit a flow of information to China. I'd disagree on both counts. The Chinese government is acting as the word's biggest VC and is also very practised and willing to take on long-term transformation plans at the national level. Shutting down foreign platforms only drives adoption of home-grown ones. In addition, they are explicitly targeting a future position as the world leader in AI. In the West I'd be betting on the MIC over individual privately owned companies to put any kind of dent in that ambition. I think any moment where Apple or Google alone could outspend and outcompete China in tech is gone.

This is probably the economic equivalent of banning say mobile phones or some other large and important sector.

For years the thinking has been that China is liberalizing, and it will eventually open up and that reciprocal sanctions or tariffs will spark unnecessary protectionism and encourage China to reverse direction.

A lot of people now, after 20-30 years of similar behaviour, believe that China was just gaming the system all along and had no plans to liberalize politically or allow fair competition from foreign business. Trump certainly tapped into that (although I think there's some consensus that punitive tariffs still won't be useful).

In the case of an import tariff, it is paid entirely by consumers, and domestic suppliers get a windfall from it, rather than sharing the burden. That's because there are two supply curves in play, domestic and international, and only one demand curve, because consumers generally don't care where the goods come from, and the internal trade of foreign markets is ignored.

2. No single country has a monopoly on innovation. Consequently the sharing of ideas from different locations and cultures is really important for moving forward. You miss out on this benefit when you consciously work to block it. Historically, the last time China was this arrogant about isolation, it didn't turn out too well.

Last Update: I've wasted enough time on this and probably should have put this in my original post.

If you think of sharing data as a resource, China just made it artificially scarce, made it extremely slow, and made it really costly which makes total business sense in the Information Age /s Hopefully our governments won't follow

They are isolating data, but hoarding data is a competitive advantage in a way that isolating knowledge isn't.

Ok they are bottlenecking data... As I've already mentioned this is an extremely inefficient way to share data. Sharing data using physically present word of mouth is a lot more expensive and slower than sharing it instantly via an open internet connection.

"Sharing data using physically present word of mouth is a lot more expensive and slower than sharing it instantly via an open internet connection."

Foreigners can set up businesses - see for example, the WFOE [0].

There are restrictions however for certain fields and business activities (infrastructure being one), so while foreigners can't just set up any company, they certainly can set up some companies if they like.

0: https://en.wikipedia.org/wiki/Wholly_Foreign-Owned_Enterpris...

The data is free flowing enough within China though - that's the bigger point ;)

It's not as if you turn off the access to Western information* and suddenly you've got a room full of Chinese developers and entrepreneurs awkwardly twiddling their thumbs - there's enough critical mass within Chinese markets to create the kind of 'daily innovation' without much input from outside.

Genuinely, massively disruptive innovation has always crossed over, and will continue to do so unless something drastically worse happens with censorship/politics.

*EDIT: plus blocking WhatsApp won't actually restrict meaningful foreign information crossing the borders - all it will do is make it difficult for dissidents to hide their online conversations, and piss off Chinese business people who need WhatsApp to converse with foreign clients.

Some would argue that it doesn't even need to cross over because multiple discovery is an actual thing with plenty of historical precedence [0]

[0] https://en.wikipedia.org/wiki/List_of_multiple_discoveries

Don't put words in my mouth, I've never said something like that. I just wanted to highlight the fact that most people still prefer local services, either due to language barrier or social/information bubbles to disprove the claim that China would somehow be magically different if there was no Great Firewall.

China would rather be in control of tracking/surveillance internally, rather than let it be done by foreign companies and nations. Thats all

>Then why take the trouble of blocking something so small and unimportant? ;)

Because they don’t want local activists to be able to use it as a secure channel for communications. WhatsApp really is irrelevant to the market, but access to secure private communications is politically intolerable to the government.