China pushes local chip purchases to counter US sanctions, says VanEck

China isn’t just weathering US chip sanctions anymore. It’s building an entire parallel semiconductor ecosystem, and the speed of that pivot is catching the attention of major asset managers. VanEck’s JP Lee flagged the trend in recent remarks: China is actively encouraging its companies to buy domestically produced chips as a direct counter to Washington’s export controls. The strategy goes well beyond gentle suggestions. Beijing has implemented procurement mandates, restricted purchases of specific foreign chips, and started listing homegrown AI processors on official government procurement lists for the first time. The localization playbook A 50% domestic sourcing requirement for semiconductor manufacturing equipment in chip fabs has been put in place, essentially forcing companies that build advanced chip facilities to source half their tools from Chinese suppliers. As of January 2026, China has limited purchases of Nvidia chips to “special circumstances,” directing firms to steer clear of certain models like the H20. The H20 was Nvidia’s specifically designed China-compliant chip, a product engineered to thread the needle of US export rules. Chinese AI chips were added to offi...