Abstract: The "Small Yard, High Fence" strategy is the Biden administration's main policy for technological competition with China. It attempts to rigorously protect technologies that are crucial for national security, where the U.S. holds an advantage and China lacks, while maintaining exchanges with China in other technological areas. Unlike the Trump administration's "Total Decoupling" which is widely criticized strategy by American politicians, academics, and the business community, the Biden administration places special emphasis on a comprehensive, balanced, and rational policy towards China. It has proposed an overall policy framework of "competition—cooperation—confrontation" with China, highlighting the role of allies in the competition. The formation of the "Small Yard, High Fence" strategy is influenced by multiple factors. Economically, under the guidance of the "American School," the U.S. emphasizes productivity, values the domestic market, encourages trade protection, and focuses on internal improvements. This leads to decisions to maintain a productivity advantage at the expense of absolute economic benefits, to decouple from China, its significant trade partner, to enhance American innovation infrastructure and reform the U.S. innovation system; and to intervene in industrial development through protectionist trade policies. Politically, U.S. foreign policy has evolved from new isolationism to internationalism, eventually becoming interventionist. In terms of decision-making logic, the strategy of technological competition with the Soviet Union and Japan, under the unique bilateral relationship between China and the U.S., shows both continuity and change. The U.S. aims to suppress and contain China in high politics related to national security while considering the impact of economic decoupling on its own industrial development. Finally, The Biden administration has thoroughly reevaluated the Trump administration's "Total Decoupling" strategy, recognizing the necessity of cooperation with China. However, the "Small Yard, High Fence" strategy has multiple inherent limitations. If implemented comprehensively, it will face significant challenges and is unlikely to achieve long-term effectiveness, potentially even resulting in a "backlash" effect. First, the strategy's focus on point-specific confrontations can easily escalate to broader confrontations, creating a "chilling effect." Second, the global trend towards openness and cooperation has become a major premise for driving technological innovation, making it difficult for the U.S. to provide the sustained innovation and leadership necessary for effectively implementing the "Small Yard, High Fence" strategy. Third, the U.S. bureaucratic system hinders policy implementation, and political pluralism maintains policy balance. Fourth, the policy considerations of U.S. allies are realistic, and the "Democratic Technology Alliance" constructed by the U.S. is not monolithic. Fifth, severing technological network connections would lead to a "hegemony erosion effect." In response to the U.S.'s "Small Yard, High Fence" strategy, first, China should adhere to the principle of globalization and implement a general strategy of "Sticking to Opening-up and Promoting Cooperation". Second, China should implement a strategy of "deliberative dialogue" with the United States, using various communication and persuasion mechanisms in the international public space to maintain and expand communication, consultation, and trust between China and the U.S. Third, China should continue to promote multi-level technology diplomacy with other countries and regions, leveraging existing institutions, institutional transitions, and multilateral cooperation for multi-layered policy responses. Fourth, China should further strengthen its technological strategic autonomy, achieve key foundational breakthroughs, establish an alternative technology application system based on independent intellectual property, pay attention to intellectual property in innovation activities, optimize the business environment, advocate for research freedom, establish a fault-tolerant mechanism, and guard against the U.S.'s technological competition path misguidance.