Why the US has a lot to lose in a tech war with China | FT


JAMES KYNGE: The US
and China are engaged in a dire struggle over tech. And some analysts
say it’s likely that tensions could escalate
from here, jeopardising the business dealings of
both American companies and their Chinese counterparts. The tech war is part of the
broader US-China trade war that started more than a year ago. But while the trade
war is being fought with tit-for-tat
tariffs, the tech war is being waged with direct
action against companies. America has blacklisted more
than 140 Chinese companies, severely limiting their
access to US-made components that they rely on. This has already thrown
several Chinese companies, such as Huawei, into crisis. But China is fighting back. It has not publicly
ordered a backlash against American
corporations in China, but some US companies are
now facing stiff headwinds. Chuck Robbins, chief executive
of Cisco, the US networking equipment maker, says Chinese
state-owned companies are blocking it from
deals and that Cisco is being uninvited to bid
for some Chinese contracts. If this treatment
goes mainstream, US companies have a lot to lose. This chart shows how US
companies operating in China sell nine times more
to Chinese customers than Chinese companies operating
in the US sell to Americans. Another giant US corporation,
the chip maker Qualcomm, also reported weakness
in its China business. The company, which gets
65 per cent of its revenue from sales in China, warned
that earnings are on track to fall to a seven-year low. America’s aim in confronting
China over technology is to punish specific
companies, such as Huawei, for alleged wrongdoings. But this is feeding into a
bigger and bleaker picture. The rivalry between
the US and China is reversing nearly 40
years of economic engagement between the world’s
two superpowers and ushering in an
era of decoupling.

, , , , , , , , , , , , , , , , , , ,

Post navigation

29 thoughts on “Why the US has a lot to lose in a tech war with China | FT

  1. Chinese steal IP, and do it with seeming impunity up until now. Time to pay the piper. And no: these two not are the world’s two super powers only China is a superpower. The United States of America is a Hyoerpower.

  2. The US can't even take down a mere company (Huawei) until now and yet Trump said trade war is good and easy to win. One thing is sure: Trump is making China very great again. Kudos to the US for such self-initiative.

  3. USA is no match for China in any tech war.

    China is an industrial powerhouse and USA has completely de-industrialised.

    The entire US economy can be summarised as soyabean.

  4. The strength of China's hand in the tech war depends on how reliant it is on IP theft. For obvious reasons it's difficult to quantify this, despite 1 in 5 US firms claiming to have been victims last year. The extent of China's reliance of IP theft says a lot about its ability to innovate. If China leans heavily on IP theft, its tech can only be as good as the tech it copies. It would be easy for western companies to retaliate against this by restricting FDI from Chinese firms and ramping up cybersecurity to make it harder for the Chinese to steal blueprints etc. If this is the case, the Chinese economy will surely be headed for stagnation. If China leans into cultivating homegrown innovation, then China may well overtake the US to become the world's largest economy.

  5. IDEA: Swimming Jellyfish robots armed with lasers hooked up to video gamers who literally shoot the dangerous jellyfish as a GAME in order to eradicate the dangerous jellyfish issues that prior attempts at culling their out-of-control population failed at (and in fact made them release their sperm to make the problem far worse than before the failed mass extermination attempt.

  6. No Worries China can take care of themselves as they are doing it as Huawei developed their own OS when Android dumped on them in addition to develop their own solid-state components and capacitors…
    The US will have to worry about rare Earths resources since the only one mine in California; Mountain Pass Mine… James Litinsky, co-chairman of MP Materials, which owns the Mountain Pass mine, said: "If we can’t challenge China, no one can", warns operator of only US mine for rare earth metals…

  7. Not just China but also Europe are moving away from American tech and most importantly from the American financial system including the petrodollar. Or in other words all the things which America is abusing in order to bully the world into complying with its demands and which give America a free and unlimited credit card. We're witnessing the fall of the American Empire as we speak.

  8. Why will the Chinese be able to sustain their effort, while we can not?
    1. While we sweat and rush watching the clock, they watch the calendar and plan years in advance instead of making the "next quarter' look good.
    2. Their leadership is stable. Xi does not have to worry about the next election cycle. The Chinese govt will announce belt tightening for the next few years and the people must accept the outcomes.
    3. The GOP has decided less and poor education is the key to america's success, infrastructure does not effect competitiveness, and the 99% shouldn't have too much ready cash in a consumer economy.

  9. decoupling is necessary if ordinary Americans want to share the cake of their strong economy.
    I hope Trump can finish the job in 3 years, at the mid of his next term.

  10. This clip did not conveniently mention the cost to western firms to technology theft and forced technology transfer by China . If something is not done now to hold China to international standards , when ?

  11. Anyone else sick to death of the mealy mouth Financial types who have such short term time horizons? China needs to be confronted about their policies. This should have been done decades ago but the past few administrations (particularly the last one) were too stupid or cowardly to address the problem.

  12. I wouldn't call this a tech war at all. It's just a commercial trade war. Corporations haven't developed any new tech for nearly forty years.

  13. Huawei's # 1 🌏 💪💪💪💪
    For decades to come with advanced technology spacecraft rocket 12G future for the world and China exciting future for USA 😁😁😁

  14. Every Chinese in the world understands this isn't a trade war – this is a desperate attempt by a dying American Empire to contain China's rise. They are using every trick in the book to stay #1, and they will fail! Economic data already indicate that China is weathering the economic war better than the US can. Huawei is leading in 5G deployment. China has responded to America's economic war by diversifying its suppliers, deepening economic ties with every country except for the US. Since the trade war begun, average Chinese tariffs have fallen from 8% to 6%, while tariffs specifically for the US has increased to 20%. FT is a UK-based publication, so this should be good news for Europe. China is always opened to foreign business, just not to Dotard's economic blackmail.

    To the suffering Iranians, speaking as a Chinese who are doing what we can to continue importing your oil: hang in there! We are thinking of you. Once China seizes global economic top spot from the US and is the new tech leader, US economic terrorism will be rendered toothless and will be banished to history. We sell you whatever you want. We are not against any nation and have no ill will to anyone.

  15. We sick with disgust at US war's/invasions/lies/bullying/propaganda so let's give China a chance to rise and be that dominant force!!!!

Leave a Reply

Your email address will not be published. Required fields are marked *