The origin and evolution of US-China technology competition: the heat never ceases!

Analysts point out that Beijing’s ‘Made in China 2025’ program is the trigger for the US-China technology war.

The US-China technology war The US and China are currently engaged in a full-blown technology war. The war began under the Trump administration and is continuing under President Joe Biden. In fact, Mr. Biden viewed US competition with China as an important front since he took office. The tech war began as a trade dispute, but quickly turned into a war for leadership in core technologies like 5G, artificial intelligence (AI), and semiconductors. With a long history of development, the US remains the global technology leader for decades, but that position is currently being challenged by China. After Washington began blocking Chinese access to core US-controlled technologies such as semiconductors, Beijing doubled down on its efforts to “de-America” ​​in its supply chain. The global pandemic contributed to tensions between the two countries, prompting President Biden to issue an executive order to review the US supply chain for core products such as chips, batteries, rare earths and supplies. medical. Proposed bills to significantly increase US investment and R&D spending in core technology have also received bipartisan support in Washington. The US-China technology war – a conflict that does not seem to have ended so far. What caused the tech war? On May 19, 2015, the Chinese government announced the “Made in China 2025” plan to promote the country’s manufacturing industry within the next 10 years. Analysts point to the “Made in China 2025” strategy, Beijing’s 10-year plan to transform the country from a “manufacturing giant to a world manufacturing power” that sparked the technological war. . After taking power in the White House, Donald Trump focused his efforts to prevent China from becoming the global technology leader. A series of events from sanctions imposed on Chinese telecommunications giant ZTE for disguising its role in selling US technology to Iran, accusing China of stealing American intellectual property and Concerns about Huawei’s dominance in 5G have turned into an extensive tech war that has won bipartisan support in the US. What is the difference between trade war and technology war? The US-China trade war began on July 6, 2018, when US President Donald Trump imposed 25% tariffs on $ 34 billion of Chinese imports, citing the need to “rebalance. equals “America’s growing trade deficit with China. Other taxes have been applied in 2018 and 2019. However, the trade war was soon overshadowed by the tech war that the U.S. fears that China is using unfair means, including state power and stealing intellectual property, to gain is targeted to become a global leader in core technologies such as AI, semiconductors and 5G. Did the US really separate factories from China? In the decades after China joined the World Trade Organization in 2001, the US and Chinese economies became intertwined. China is a factory that manufactures low-cost American goods, from computers to stuffed toys. President Donald Trump’s “America First” policy and the US-China trade war have sparked calls for the US to reduce its dependence on China-based supply chains. Initially, withdrawing from China was rejected as impractical because of the cheap labor force and the large Chinese market that American companies could not ignore. However, a form of seclusion has received the support of the US administration, even from technology leaders such as former Google CEO Eric Schmidt saying that “splitting” will benefit the United States. . The concept of “split” existed in the internet space when Facebook and Google were not allowed to operate social networks and search engines in China, while the US also banned or restricted the presence of media. Chinese social media like TikTok and WeChat in the US. The global pandemic highlights the world’s reliance on China for important medical supplies such as masks and also spurs calls to bring supply chains back to the United States. In February, President Joe Biden signed an executive order calling for a review of product supply chains critical to chips, batteries, pharmaceutical ingredients and rare earth minerals. What is China doing to improve the influence of US actions? China attaches special importance to its own technology development, especially the chip. Although China initially imposed tariffs in retaliation, the top leaders’ call to action was technology self-sufficiency. In 2018, President Xi Jinping said “China must persist in the path of self-reliance in the context of increasing unilateralism and protectionism in the current world”. After Huawei was blocked from buying US chips and China’s largest semiconductor maker SMIC was restricted from buying U.S. technology for alleged association with the Chinese military, Beijing has intensified its focus on achieves semiconductor self-sufficiency. The Chinese government has supported the domestic chip industry with favorable policies, from tax breaks to state subsidies to promote the rapid development of the semiconductor industry. Technology is also a major focus for China in its 14th Five-Year Plan (2021-2025) announced in March, calling for the promotion of new digital industries, including AI, data. large, blockchain and cloud computing, along with expanding the use of 5G to many other industries such as smart transportation and logistics. Why is the US specifically targeting Huawei with trade sanctions? Washington’s interest in Huawei dates back to the early 2000s on suspicions that the Chinese company has close ties with the Beijing government. Years later, Huawei’s rise as the global leader in 5G technology rang alarm bells in Washington. One of the first public moves against the Chinese company came in January 2018 when US lawmakers pressured US telecom giant AT&T to withdraw from the phone distribution agreement. smart Huawei for US consumers. Seven months after AT&T’s decision, Washington barred government agencies from buying equipment and services from the Chinese company. When Huawei was placed on the US Commerce Department’s Blacklist in 2019, Google suspended some of its business with Huawei that involved transferring hardware or software products, except for protected products. by open source license. This is another “slap” on the Chinese technology corporation. For the Chinese government, Huawei is pride and a testament to the strength and potential of the Chinese people. Within three decades, since being founded in 1987 by Ren Zhengfei, Huawei has made some “miraculous” developments. From a company focusing on manufacturing phone switches, Huawei has become one of the largest private companies in the world, a leader in areas such as telecommunications equipment, smartphones, and electricity. cloud computing. What impact do the sanctions have on Huawei? Initially, the sanctions didn’t seem to affect Huawei much, which reported record sales of 858.8 billion yuan in 2019, up 19.1 percent year-on-year. Huawei also quickly revealed a self-developed operating system called HarmonyOS to replace Google Android. However, after Washington expanded the scope of sanctions in May 2020, requiring foreign chipmakers to use US technology, including TSMC and Taiwan’s MediaTek, to apply for a license to sell chips. for Huawei, the Chinese telecom giant appears to be in a slump again. The biggest impact is on Huawei’s smartphone operations. Due to a lack of high-end semiconductors, Huawei had to sell its Honor smartphone business to a newly formed conglomerate comprising more than 30 dealers and carriers. In the first quarter of 2021, Huawei was “kicked” out of the top 5 largest smartphone companies in the world in terms of sales. As stockpiles of smartphone components are declining and Honor’s business is over, Huawei will face even more pressure in the smartphone business. Many Chinese tech companies have caught up with the US Popular Chinese applications run the risk of being banned in the US. Image: The Economic Times. In October 2019, the US Commerce Department added 28 other Chinese companies to the trade blacklist about Beijing’s alleged human rights violations of the Uighurs. In May 2020, more than 20 Chinese government organizations and companies, including software technology giant Qihoo 360, were sanctioned for “assisting with procurement of items for military purposes in China. China”. The most recent US sanctions involve seven Chinese supercomputing entities blacklisted for national security concerns. Francis Lau, professor of computer science at the University of Hong Kong, said China’s supercomputers mainly use Intel, AMD and IBM CPUs. “The sanctions will certainly have a significant effect on China’s ability to stay at the top of supercomputers, since most of the components in its supercomputers today are US-made. Although it will be.” There are alternatives from other countries like Japan and South Korea, but the American component is still the best, ”said Professor Lau. Will the tech war be any different under the Biden administration? US President Joe Biden holds a semiconductor chip when he speaks before signing the executive order to address the global shortage of semiconductor chips in the White House. Photo: REUTERS In short, no. After Donald Trump’s tenure, President Biden continued to put pressure on Chinese technology and especially on Huawei’s case. In March, the US Commerce Department further restricted the products US companies can sell to Huawei, with clearer bans on the export of components such as semiconductors, antennas, and batteries. can be used in Huawei 5G equipment. A day later, the US Federal Communications Commission designated five Chinese technology companies, including Huawei, ZTE, Hytera Communications, Hikvision and Dahua, as “unacceptable risks” to security. America. As for Huawei, analysts believe that President Biden can offer a more effective policy than his predecessor in curbing Huawei’s global 5G ambitions by taking a more friendly approach to international partners in Europe and elsewhere. That could be more effective in isolating the Chinese company. In addition to sanctions on individual Chinese tech companies, President Biden has also pledged to more than double his investment in science and technology, focusing on areas like AI. and quantum computing. President Biden’s ambitious $ 2 trillion plan to improve US infrastructure includes an estimated $ 50 billion investment to help the country less reliant on chips manufactured abroad.