CHINAwatch

China slams US charges against Huawei

My TV interview with RT on 29 January.  

How US-China technology rivalry is likely to play out in coming years - Huawei and "supersonic trains"

A PowerPoint presentation to the EGN Founding Chairmen's Group in Hong Kong on 11 January, 2019 serves as a backdrop to the growing US-China technology rivalry in coming years. 

Download How US-China rivalry is likely to play out in coming years

Huawei

As regards Huawei, it is a non-listed Chinese company with shares overwhelmingly owned by its staff. It has now overtaken Apple as the world's second largest supplier of cell-phones. It generates global revenue of some US$100 billion, double that of CISCO.  

According to some estimates, the company has built up a commanding position on 5G around the world. More than 45% of its 170,000 employees and 10% of its overall revenue are devoted to R&D. It has set up 16 R&D centers in countries including Germany, Sweden, the US, France, Italy, Russia, India, and China. It supplies 5G routers and switches to some 160 countries worldwide. It accounts for a substantial proportion of 5G's international patents and international 5G standard-setting committees. With a 5-year head start in 5G mobile technology, Huawei's "tdd specification" is claimed to be the best to maximize the potential of 5G. The company has been working very diligently over the past three decades to establish customer trust in quality-price competitiveness and "come hell or high water" customer service reliability around the world. 

Huawei has 350,000 5G stations around China (compared to 30,000 stations in the United States). The average price of its 5G products is a fraction of similar products in the West. This year, dozens of 5G trial locations are being rolled out across the country. 

It seems that the dice for China's global dominance of 5G is already cast, at least according to the hubris in a Japan Economic Times article (in Chinese) of 10 January, 2019. 

Download 日本經濟新聞2019年1月10日有一篇長文專門分析5G霸權爭奪戰

However, Huawei’s ‘Wolf Culture’ Helped It Grow, and Got It Into Trouble, according to a New York Times article of 18 December. In any case, while there is still no smoking gun or concrete evidence of any malicious "backdoors" in Huawei products, the US has now filed criminal charges against Huawei and CFO Meng and is pushing allies to fight against Huawei's perceived threats. 

Supersonic trains

Beyond Huawei, China is slated to be opening up another technology frontier, that of magnetic-levitation supersonic trains capable of traveling at a maximum speed of 4,000 km per hour, multiple times the speed of normal passenger trains, according to news on CCTV 13 and widely-circulated reports such as on Sina.com Click here and here and on Mail Online This technology has been on the cards in the United States and a few other countries including India, but nothing much has hit the ground running.  

According to China Aerospace Science and Industry Corporation (中国航天科工集团), the T-Flight ("Flying Trains") Plan is to advance the operational speed by three stages, with a mid-term target of 2,000 km per hour by 2027, linking China's various major urban clusters and regions into a one-hour commuting economic circle, including both people and goods. If the development proves successful, together with China's Belt and Road Initiative, it would revolutionize traditional concepts of sea power supremacy, paving the way for China's trajectory as an ultra-modern nation by 2050. 

 

 

 

Prospect of a New U.S.-China Cold War

Featuring analyst Ali Wyne of the Rand Corporation, a podcast of 28 January 2019 hosted by the CHINAfrica Project (a non-profit educational initiative founded in South Africa partnering with NGOs in the United States), explains that reference to a new Cold War risks conflating a number of major distinctions from the Cold War with the USSR.

The current confrontation against China springs from a "collapse" of the original hope that bringing China into the global liberal order would eventually result in China becoming more like the West, at least in economic terms. The disillusionment is exacerbated by consensus across the aisle that China's growth so far has been at America's expense, short-changing in level-playing field, reciprocity and intellectual property protection.

Nevertheless, China has largely been branded by the United States as a competitor, albeit an almost peer competitor, rather than an out-right antagonist across the board. This is because (a) there is much more mutual dependence in the global supply and value chain, (b) any rivalry remains largely, though not entirely, economic and technological, rather than mainly military and ideological and (c) there is no ideologically-linked opposing bloc of "communist" nations. The main aim of the current pushback against China remains the creation of "fairer" rules of the game for America to compete with China, apart from a degree of containment of China's assertiveness. 

Additionally, some of the backlash against China is due to the global rise of anti-globalization populism. This is informed by a frustrations and anger of those who feel being left out by the wave of globalization, who feel cheated by the elite and powerful in their respective society. Brexit in the UK and the Yellow Vests in France are echo-chambers of similar frustrations of the grassroots in America, of which Trump is largely an outcome. 

Headlines about China’s weak growth are somewhat misleading

The above is pointed out by a report of The Economist 0n 23 January, 2019. The headlines ignore that China's economy has a much larger base, adding 8 trillion yuan in 2018 compared with 5 trillion yuan in 2007, the year with the fastest growth (14.2%) in recent decades. Moreover, shortfalls in foreign sales were offset by much larger domestic consumption. As for marginal utility of credit, "in 2015 it took more than four yuan of new credit to generate each yuan of incremental GDP. In 2018 that multiple fell to 2.5, in line with China’s average over the past 15 years," the report says. This could mean that Beijing is somewhat less worried about the trade war that it is portrayed to be. 

US's latest pushback against Huawei

Interview with Radio Sputnik of Moscow of 16 January, 2018.