Bar­ring Lat­tice deal no help for US in­ter­ests

Global Times US Edition - - EDITORIAL -

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 break- throughs 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.

Il­lus­tra­tion: Shen Lan/GT

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