Anyone who thinks US-China relations couldn’t deteriorate any further might have to try avoiding the news for a while. Judging from recent developments, they might be about to get a whole lot worse.
While the world waits on news about a possible trade breakthrough that will allow the Trump administration to holster its tariff guns for the time being, a related battle for technological supremacy is being fought on a different front. Many have speculated that the tariffs themselves are actually aimed at China’s high-tech ambitions, not the trade deficit often cited by US President Donald Trump. Washington’s weapons are not, however, limited to tariffs.
After a move last week to restrict US component manufacturers from selling to Chinese telecommunications firm ZTE, it was reported on Wednesday that the US Department of Justice (DOJ) was investigating Huawei for violating sanctions on Iran. The ban slapped on ZTE, also related to Iran sanctions violations, has been described as a near-fatal blow to the firm that relies heavily on imports from US suppliers.
The DOJ investigation into Huawei, first reported by The Wall Street Journal, is one more indication of Washington’s growing anxiety as China makes headway becoming a leading global player in high-tech industries. Political pressure has largely kept Huawei out of the US market, with the Chinese behemoth in effect prohibited from selling telecommunication equipment to US service providers. Wireless carriers have also been pressured not to sell its mobile phones.
The action against ZTE, and the ongoing investigation into Huawei, come as both companies position themselves to lead a transition to fifth-generation wireless networks. China plans commercial production of its first 5G smartphones next year, Caixin reported on Monday, amid expectation of a national network by 2020.
While Huawei is well positioned to set standards for the new generation in wireless networks, the US has been trying to rally opposition among allies to using the Chinese firm’s technology. During a state visit to Washington in February, Australian Prime Minister Malcolm Turnbull was reportedly briefed by US intelligence officials on the dangers of using Huawei’s 5G technology. In a presentation prepared by a senior White House official proposing a national 5G network in the US, which was roundly shot down, one bullet point read “Japan all in,” suggesting the US ally had been approached regarding the proposal.
Commenting on the ZTE ban, a longtime adviser to both Chinese leaders and multinational corporations, Robert Lawrence Kuhn, wrote on Tuesday that he was starting to worry about a “looming tech war.”
“I’ve been concerned, but not worried, over what others have called ‘a looming trade war,’” Kuhn said. “But I am now worried over what I will call a ‘looming tech war,’ because the structural imperatives go deeper.”
The investigation into Huawei is another sign that these “structural imperatives” are driving an aggressive US strategy to defend its leadership in high-technology industries at all costs. Judging from recent legislation and action taken by government agencies, the strategy also appears to have broad support among US lawmakers of both major political parties and the Trump administration.
The end result of all these moves to stymie China electronic companies will likely be that US chip companies lose their market in China. That will be a self inflicted, decastating blow
I can’t remember an instance when Israel issued a warning and failed to act. Russia is not as tough as everyone imagines. The tempo of war in the area has greatly degraded their ability to counter an Israeli threat. If Russia reacts that would put their navy base at Tartus in play. Be careful what you wish for.
Does it has to be a zero sum game? We have been here before in arms control. See what happen.
In their effort to sabotage China’s Made in China 2025 drive, the Americans think they have found China’s weakness following the sanction on ZTE. But if they make the same move with Huawei, then I reckon China will go its own path in its tech build-up, and Americans will increasingly be squeezed out of the growing consumer market in China, which has already surpassed the Americans with its middle-class now outnumbering them. The Chinese will just forge their own path, and I wouldn’ bet against them succeeding. Meanwhile, the American sense of reality (or lack of) can perhaps best be summed up by a story CNBC was floating yesterday: "Trade war could be tipping point for China’s debt-ridden economy." Like, wow.
Westerner favor throw away culture uses 7 times more resources than average Chinese. They are the type you mentioned, not saving conscious Asian.
Low Shen-Cheang True as you may say, but admit it or not without the US, EU, ASEAN, AUSTRALIA, India and Japan, your economic gains will implode on its own.
China cant seem to create its own high tech equipments. It continous to steal technology from the US and Russia. A bully to smaller nations instead of spearheading economic growth for the region. It relies heavily on trade with other nations and vise versa. And now that North Korea decided diplomatic ties with the South, and eventually not to be used by China as a bargaining chip, China now will find itself alone surrounded by Japan, India, South Korea, Australia which includes Canada, Britain, France and the EU. Economic warfare is now the norms and if China thinks that military solution is the most viable approach in grabbing South China Sea, China is not as wise as most of you may think. The world is aware of technology theft and sabotage that China has been playing.