Thursday, May 23, 2019

China Won't Be No. 1, Vows Donald Trump

US President Donald Trump is no longer hiding the fact that he is begrudging and envious of China’s rising status in the world. 

Therefore, it is not surprising that he has vowed that China will not become the world’s top superpower under his watch (Bloomberg as cited by South China Morning Post, May 20, 2019). 

In an interview with Fox News, Trump said he was “very happy” with the trade war. “We’re taking in billions of dollars,” he said, when asked about the endgame in the trade conflict. “China is obviously not doing well like us” – his economic naivety blatantly showing. 

Trump’s comments signalled he is in no rush to get back to the negotiating table after talks to end the trade conflict fell apart. He has since raised tariffs on Chinese goods and in a follow-up move, he went on to restrict Huawei Technologies’ access to the US market. 

He is not only impeding trade but he has opened another battlefront – this time, the focus is on technology. 

Yes, the Trump Executive Order on Huawei can be expected to negatively affect the ability of Chinese companies like Huawei and nearly 70 of their affiliates (and not forgetting ZTE) to remain up to date on US-sourced technologies that are key to full functionality. 

The idea to penalize Huawei is not so much a security concern as to stifle, if not choke back the tech company’s progress made with regard to the 5G network. After all, Huawei is seen as representing China. 

5G is expected to usher in an Internet revolution, since the peak rate of communication speed can be more than 10 times faster than that of a 4G network, making next-generation mobile communication technology fast enough for applications like AR, VR, the Internet of Things and smart driving. Meaning, 5G will be the backbone of the world economy. 

And, indisputably, China is already at the forefront of 5G technology – having taken accelerated steps to gain a lead in the race towards commercialization of this next-generation communication technology. 

In February, Huawei launched their full range of 5G end-to-end product solutions at the 2018 World Mobile World Congress; and two months later, China’s three major telecom operators, i.e. China Unicom, China Mobile and China Telecom, have won government approval to pilot 5G networks in multiple cities across the country. 

On April 23, the first 5G test network was launched in Chongqing, as another step towards 5G commercialization in China. 

Moreover, China is expected to release its first 5G mobile phone during the second half of 2019, said Wen Ku, director of the telecom development department at China’s Ministry of Industry and Information Technology.

Susan Crawford (left), a professor at Harvard Law School and an expert in tech, public policy, and how they affect our lives, believes China will likely corner the 5G market (Wired, February 20, 2019).

As I see it, it is a massive mistake to push China into a corner. 

China will not be bullied. I can anticipate the country to multiply efforts to produce advanced technologies domestically. Either way, the US will lose out. 

As a negotiating strategy, the Huawei decision makes even less sense. US officials may have claimed it had nothing to do with stalled trade talks – but it certainly looks like Trump wants to use Huawei as leverage, just as he did last year with ZTE Corp. 

I don’t foresee Huawei to capitulate and China too will be more determined to stand firm. Sure, these Trump-initiated moves may slow down China – but believe me, there’s no stopping China. 

After all, economists at HSBC Holdings in 2018 projected China was on course to be the world’s biggest economy by 2030. The nation’s gross domestic product will stand at $26 trillion in 2030, while US GDP will rise to $25.2 trillion, according to the HSBC projection. 

Even the International Monetary Fund last year said China could become the world’s largest economy by 2030. 

China will be the force to be reckoned with, whether Trump likes it or not. There’s no doubt about it. It’s the US of A that must play catch-up.

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