China's Xi is building an economic fortress against U.S. pressure

A day in China could easily start like this: Roll out of bed and swipe through WeChat messages on your Huawei smartphone.

- Brian Spegele, Jason Douglas & Yoko Kubota

Hop into a BYD electric car and drive to the railroad station, where a high-speed train from a state-run factory whisks you to your destination. Chinese-designed nuclear plants, solar farms and wind turbines power the city's lights.

China is racing to make itself less reliant on the outside world's products and technology—part of a yearslong effort by leader Xi Jinping to make China more self-sufficient and impervious to Western pressure as tensions with the U.S. rise. Beijing has poured hundreds of billions of dollars into favored industries, especially in high-end manufacturing, while exhorting business leaders to fall in line with the government's priorities.

In many ways, the effort is succeeding.

Instead of relying on foreign firms for robots and medical devices, China is now making more of its own. Chinese-made solar panels are replacing some of the country's need for imported energy. The success of China's electric-vehicle makers and artificial-intelligence upstart DeepSeek has ignited fears that China may even eclipse the West in some cutting-edge sectors.

Beneath those wins, however, Xi's industrial policy is hugely expensive, eating up state resources as government revenues are stagnating. One estimate by the Washington-based Center for Strategic and International Studies put China's annual spending on industrial policy at around $250 billion as of 2019. Large sums have been wasted on projects that failed, especially in areas such as advanced semiconductors.