...even if there are significant breakthroughs on the trade front -- and that’s a very big “if” -- it will do little to change the anti-China mood in Washington. Partisan rancor and the president’s Twitter musings may get the headlines, but there is broad agreement in the nation’s capital that the Sino-U.S. relationship has fundamentally changed.
Underscoring the complexity of the U.S.-China trade relationship, careful observers will notice that there are more than two sides vying for influence at the table as negotiations continue in search of a possible deal. In fact, when it comes to the most important strategic question at the very heart of the dispute--what to do about China’s mercantilist campaign to dominate global markets for key advanced technologies--there are at least three contending positions on the U.S. side alone.
Silicon Valley is belatedly waking up to the fact that China systematically extracts the most advanced technology from the west, using both legal and nefarious means. So far, the US and European response has been entirely defensive. The US government tightened up laws last year to make it tougher for China to invest in our most advanced technologies. Germany and the UK are also increasingly wary of Chinese investment.
President Trump directed the Commerce Department in May to place Huawei on its “Entity List,” which is seen as a death sentence for included groups as U.S. companies are banned from doing business with them. A “temporary general license” allowing Huawei to continue doing business in the U.S. had already been granted for one 90-day period.
China’s largest contract chip manufacturer is years behind its rivals when it comes to the latest technology, analysts said. That assessment comes as the world’s second-largest economy faces a tough task in closing the gap with the U.S., South Korea and Taiwan and increasing its self-sufficiency in semiconductors as its trade war with Washington continues.
The US economy did pretty well during the Cold War. Per capita GDP rose by 150% in real terms from the end of World War Two through the collapse of the Soviet Union, with the stock market notching a similar inflation-adjusted performance. And when the long twilight struggle was over, America was on the verge of a historic productivity surge and technological advance.
As the China-U.S. trade talks resume in Shanghai, with President Trump warning President Xi that there will be consequences if China tries to “wait Trump out” until next year’s U.S. presidential election, the key question is whether there is a path to reengagement and some normalcy over trade relations—or whether a new trade cold war, with an ultimate decoupling of the two economies, is the inevitable endgame.
Venture capitalist and Facebook board member Peter Thiel has reiterated his stance on Google’s presence in China, saying that it is “unprecedented” for a company to refuse contracts with the US military while seeking greater interaction with China.
China’s IP theft has cost the GDP in the United States something upwards of $600 billion a year. Our GDP is what allows us to build the military, what allows us to protect ourselves. For example, Motorola in 1997 had 80 percent of the cell towers in the world and networks to run those cell towers, 80 percent market share, and they were a $17 billion company. Then they did a deal with Huawei. Huawei stole their technology, turned around, and sold it subsidized to the Chinese government. In 2011, that $17 billion in 1997 was sold to Nokia for $900 million.
Huawei has launched its own operating system -- the HongmengOS, known in English as the HarmonyOS, said the CEO of the Chinese tech giant’s consumer division, Richard Yu, on Friday.Speaking at the Huawei Developer Conference in the Chinese city of Dongguan, Yu said the operating system can be used across different devices from smartphones to smart speakers and even sensors.