On Monday the United States finalized “rules that will limit US investments in artificial intelligence and other technology sectors in China that could threaten US national security” covering sectors such as semiconductors, artificial intelligence, and quantum computing. The measures are part of the Biden administration’s broader strategy to curb China’s technological rise by any means possible, which has also extended to the inclusion of thousands of firms on export control lists, as well as forcing third-party countries to follow suit with restrictions.

The new rules also apply to the Hong Kong and Macao Special Administrative Regions , resulting in Hong Kong’s Chief Executive John Lee Ka-chiu condemning the new restriction measures, saying: “It once again shows that American politicians seek their own political interests, undermining normal investment and trade, the free market and economic order. This will harm the global supply chain,” and moreover that it will “harm the interests of others, as well as that of the US as a nation, its people and its companies,” vowing to “work with the country to protect national interests”.

First of all, it should be no surprise that the US now simultaneously targets such restrictions at Hong Kong, Macao and the Chinese mainland. While Hong Kong is a separate customs territory with a distinct system of economic and financial administration, it is nonetheless the gateway to the world for Chinese firms and an access point for capital. From a strategic point of view, the US believes that the city should strictly represent Western interests and not Chinese ones, as it were in the past as an enclave of British influence projecting into the Chinese mainland.

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Now that US influence in the city’s politics has declined, it is subsequently doing everything it can to undermine Hong Kong as an international financial center and wants to deter US investment, to hurt both the city and the Chinese economy as a whole.

But such restrictions have a boomerang effect. Since the Donald Trump administration US foreign policy has followed a trend of “breaking up globalization”. Once the staunchest advocate of open global trade and commerce, the US has ultimately come to the belief that if globalization does not coincide with the expansion of American hegemony and ideology, then it must be opposed, especially if it seems to be enabling the rise of China. Thus, the US has poisoned the global investment and trade environment by introducing a new regime of tariffs, protectionism, subsidies, export controls and now investment controls, tearing up the multilateral economic system accordingly. This has been exacerbated by wars and conflicts.

These policies have a negative ripple effect on the world as a whole by damaging investor confidence, and it is no surprise that since the outbreak of the COVID-19 pandemic, the global economy has generally been struggling and there is a widespread sentiment that “the good times” are over as conflicts escalate, especially in developed countries such as the Eurozone economy, Japan or the United Kingdom. More importantly, China has likewise been a hugely important market for American investors; and while the administration is attempting to create a “deterrent effect”, such restrictions often impose huge losses on American companies by forcing them to withdraw or reduce their presence in the Chinese market, often losing ground to domestic competitors.

In particular, the US’ belief that it can cripple China’s innovation is fostered in overconfidence and ideology. US policymakers are led by an assumption that “China cannot innovate”, which is based on a faulty understanding of the country’s ideology and society, and thus tend to underestimate the ability of local firms to catch up despite restrictions. The biggest recent example has been the damage US policies have done to Intel in the chip market.

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On the other hand, the US believed that excessive layers of restrictions would cripple the Chinese telecommunication firm Huawei, which has since developed its own chipmaking capabilities to compete with certain American products, while Shanghai-based Semiconductor Manufacturing International Corporation has advanced to become the world’s third largest chipmaker.

By trying to exclude China from the supply chain, the US also cuts itself off from the most lucrative market in the world, trying to secure a pipe dream of crippling China’s technological development. There is no indication that these “small yard, high fence” policies are ultimately working, yet they nonetheless contribute to a more uncertain, unfavorable and divisive global economic system that leads toward potential conflict. If you play zero-sum games, then you ultimately always harbor the risk of losing if your plan goes wrong.

The author is a British political and international-relations analyst.

The views do not necessarily reflect those of China Daily.