US will also be scalded by its tech ‘cold war’
Editor's Note: Some US-led Western countries have launched a technology “cold war” against China by targeting Chinese high-tech enterprises such as Huawei, a telecommunications equipment maker and major 5G technology player. Given the twists and turns of the tech “cold war”, how should Chinese high-tech companies respond to the developments? Two experts share their views on the issue with China Daily’s Liu Jianna. Excerpts follow: Kang Rongping, a research fellow at the Institute of World Economics and Politics, Chinese Academy of Social Sciences
Last week US President Donald Trump said that Washington wants to catch up in the 5G race through competition and thus won’t seek to block companies, including Huawei, from the United States’ 5G market on the pretext of security concerns.
This may be encouraging news. But it’s no use just paying lip service to fair competition in the telecom sector while the US delegation to the world’s biggest mobile industry trade fair that opened in Barcelona, Spain,
on Monday continued its smear campaign against Huawei by trying to persuade telecom executives from other countries not to use the Chinese company’s products.
What the US has done for the past year or so in a desperate bid to maintain its supremacy in the high-tech field is grossly unbecoming of a superpower. It is essentially wielding its national power to contain China’s rise in the high-tech field — perhaps because it is perturbed by a number of Chinese companies that have come to the fore on the world stage.
However, the United States’ wheeler-dealer like attitude and actions will not only inflict pain on China but also cause damage to the high-tech and telecom sectors in the US as well as the rest of the world.
To begin with, given that the world economy is closely intertwined due to globalization, which some countries including the US now vehemently oppose, any action against China’s tech giants is bound to cause a chain reaction — dealing a blow to their suppliers, clients, consumers and other parties involved no matter which part of the world they are based. Regardless of the inner workings of modern economics, any
undue action taken against China’s tech giants could cause havoc for a number of global enterprises and hurt the interests of many countries.
More important, the US is trampling on the existing global economic order, which it incidentally helped establish after World War II. The tech war waged against China should sound the alarm for other countries, too, as it shows the world’s only superpower has the ability and desire to derail, if not stop, the natural development of technology worldwide.
Confronted with the US’ witch-hunt, Chinese tech companies need to prepare for the long haul, because for all the gunfire directed at the Chinese high-tech companies, China still lags behind advanced tech powers such as the US and Japan. For instance, only one Chinese company, namely Huawei, figures among the top 50 global companies on the 2018 EU Industrial R&D Investment Scoreboard, a barometer measuring companies’ investment in R&D.
To a large extent, there are still gaps for Chinese companies to fill, because R&D investment says a lot about a company’s short-term financial situation and longterm
competitiveness.
Nevertheless, we should take Trump’s conciliatory remarks with a grain of salt, because to maintain the US’ tech advantages, the Trump administration is likely to more strongly prevent Chinese technologies and inventions from entering the US in the long run.
Trump, to a certain extent, has softened his stance against the Chinese tech companies represented by Huawei thanks to the progress made at the China-US trade talks. That the United Kingdom and New Zealand, too, have relented on the Huawei issue shows they, as well as some other countries, are struggling to strike a balance between their national interests and allegiance to the US. After all, in terms of technology and price, Huawei’s products are runaway leaders.
Given the inconsistency of the US and its allies on the high-tech issue, China should hone its own technologies and products, Chen Fengying, a senior researcher in world economy at the China Institutes of Contemporary International Relations and focus its energy on reaching the destination rather than on the rough and arduous road leading to the destination.
The calm Huawei has shown and the restraint it has exercised toward the US and several of its allies despite their unethical business practices and relentless squeezing of its operating space in the preceding months are an example for what Chinese companies should do when foreign governments and companies try to bully them.
Apart from seeking the help of the law and hiring a group of competent lawyers to fight its case, Huawei has also continued to improve its technology, which ranks fifth among the world’s top 50 companies that have invested the most in R&D, according to the European Commission’s Joint Research Centre.
Of course, the Chinese companies should prepare to meet any eventualities, but they should not be over-pessimistic about the future. They need to understand that time is on their side and a vast market is there for them to explore despite the attempts of the US and its allies to compromise their business. Even in the US, its 50 states have different policies and may adopt different attitudes toward similar or the same issues.
Besides, China’s market of more than 1.3 billion people offers local companies huge room for growth.
As such, Chinese companies should stay vigilant in a fast-changing world but not lose heart when pestered by certain foreign governments, a phenomenon which is expected to become increasingly frequent in the short term. And amid all this, the government should take concrete measures to create a fair environment for the Chinese companies to grow and innovate.
The views don’t necessarily represent those of China Daily.