Barring Lattice deal no help for US interests
US President Donald Trump Wednesday barred the sale of Lattice Semiconductor to an allegedly Chinese-backed company, which suggests the $1.3 billion deal failed eventually.
This is not the first time that Washington has blocked the Chinese acquisition of US companies. Yet it accused China of requiring US companies in the country to transfer their technologies. And recently the US Department of Homeland Security demanded federal agencies not use Russia’s Kaspersky software over concerns that Moscow may collect US intelligence with the software. The US appears to be obsessed with protecting its interests.
With cutting-edge technologies in various sectors, the US is averse to Chinese acquisitions probably based on its own experience of having undermined the political and economic security of others through worldwide investment.
But what Chinese companies want to acquire are seldom those with the most advanced technologies which are too thriving to accept an acquisition. Chinese might be keen to buy Boeing or Intel, but would they make a deal?
Most US companies for sale are in difficulty and seek a mutually beneficial result out of Chinese acquisition. But the US’ overly strict control has to a great extent cut off the channels for these companies to seek finance from the Chinese market, the world’s largest emerging one, and hence dented their marketization. By stopping Chinese companies like Huawei from entering the US market, the US actually protects its underdeveloped sectors. This gives no help to US competitiveness in the long-run.
Besides, by frequently disturbing hi-tech business, Washington has set a bad example for the rest of the world and prompted other countries to become more alert about their national security. As a result, political factors may increasingly meddle in the market and eventually jeopardize the interests of the largest exporter of technology and capital – the US itself.
The latest ban again reminded China that as it climbs up the chain of hitech industry, its development needs to count more on its own innovation.
In the early stage of China’s industrialization, technologies and production lines could be easily purchased from the West that dumped its low-end technologies on China. But now the West considers China as a competitor and it is therefore treated differently in business dealings.
The US’ block on the Lattice acquisition indicates that US decision makers would rather pay a cost of $1.3 billion to prevent China from obtaining the technology. It demonstrates how resolute the US is in keeping its technological edge over China.
There is nowhere to buy the world’s top technology. China made breakthroughs in military technology while it was poor and it needs to employ the same spirit now to achieve critical technological progress. This is not impossible given the sound foundation laid by industrialization. What’s most important is that we have to be resolute in this regard and be well-organized.
The world’s economic order generally facilitates developed countries to keep their advantages. Despite China’s sizable economy, Western countries repress China more skillfully in cuttingedge industries than in the geopolitical game. China has to make institutional innovations that bolster hi-tech improvement.
The success of China’s high-speed rail and Huawei show how much creativity institutional improvement can help make. They are like sparkling dots. If more such dots are connected, they can become the splendor of the long-expected rejuvenation of the Chinese nation.