The long path a restricted semiconductor travels before reaching China now illustrates the practical limits of export control enforcement better than any policy paper. That is the core argument of a new analysis published by I by IMD, the insight platform of Swiss business school IMD, titled "The long way to China: What chip smuggling reveals about trade today."

The piece examines how advanced chips, subject to sweeping export restrictions imposed by the United States on China, continue to move through indirect channels — third countries, intermediaries and opaque logistics chains — before arriving at their destination.

What does smuggling reveal about enforcement?

The IMD analysis frames chip smuggling not as an anomaly but as a structural feature of contemporary trade. When a product is small, high-value and easily concealed, unilateral export controls create an immediate incentive for rerouting.

For trade professionals, the implications are direct:

• Compliance teams cannot rely on stated end destinations alone.
• Transshipment hubs require enhanced due diligence.
• Enforcement gaps between jurisdictions determine where diverted goods actually flow.

The article's central observation is that the physical journey of a smuggled chip — the "long way to China" — maps the distance between regulatory intent and commercial reality.

Why does it matter for trade policy?

Smuggling cases have surfaced repeatedly since the US tightened export controls on advanced semiconductors and chipmaking equipment destined for China. Each reported incident shows the same pattern: a restricted component moves through intermediary markets, changes hands among trading entities, and surfaces in applications the original controls aimed to prevent.

I by IMD positions this as a broader lesson about trade today. Controls written in one jurisdiction operate across a global logistics network that no single authority fully oversees. The result is a persistent gap between what regulations prohibit on paper and what supply chains deliver in practice.

Who should read this?

The analysis targets executives and policymakers rather than a general audience. It connects individual enforcement cases to strategic questions:

• How effective are unilateral controls in a multipolar trading system?
• Where does responsibility for diversion sit — with exporters, intermediaries, or regulators?
• What does the persistence of smuggling say about the design of future trade policy?

The full article, "The long way to China: What chip smuggling reveals about trade today," is available through I by IMD.

Note: This summary reflects the headline and framing of the published piece; readers should consult the original article at I by IMD for the author's full data set, case detail and conclusions.