Huawei Technologies Co., one of China’s leading tech companies, is an important symbol to the Chinese nation. Nonetheless, it is also among the first tech giants from the Asian powerhouse to be hit by U.S. export restrictions.
Until recently, the company had been subject to strict government approvals for American businesses to sell their products or services to the company. Even then, applications for new licenses were stuck in a slow bureaucracy. But now, according to a Reuters report quoting officials familiar with the matter, the administration of U.S. President Joe Biden has halted issuing these approvals altogether – and that represents a total mask-off movement for the U.S. and its intentions for China.
The current U.S.-led trade war against China that got underway with former U.S. President Donald Trump was based on the pretense of Beijing implementing so-called “unfair trade practices.” The accusations ranged from intellectual property theft to currency manipulation and preferential treatment for state-run businesses.
In reality, China has deepened its commitment to reform and opening-up for decades, especially since joining the World Trade Organization (WTO) over two decades ago. Yet, the U.S. has routinely failed to meet its obligations by implementing unilateral sanctions and unfair tariffs against China, which have resulted in the WTO leveling decisions in favor of Beijing in disputes.
The U.S. is the country with a trade protectionist streak running through both of its major political parties that has only worsened tensions with its major trade partners and allies.
The U.S. has also made accusations of “human rights abuses” and even “genocide” in Xinjiang Uygur Autonomous Region. The U.S. used this moralistic pretense to attempt to cripple China’s world-leading solar panel and polysilicon industry by sanctioning them over “forced labor” concerns.
Apparently, the U.S. wants to get its foot in this market to boost domestic jobs and score political points for its increasingly dissatisfied public. The pretense, which attempted to get its allies to join, was so ridiculous that Washington has pretty much shelved the issue for the moment.
The latest bans on Huawei and attempts by the U.S. to hurt China’s standing in the international semiconductor domain don’t have such pretenses. There are no slogans such as “unfair trade practices” or “human rights” at play in this debacle. It’s economic hostility without any of the dressings as before, which is why it signifies a severe escalation in the ongoing hostilities between both sides. It can be called, as many others have already dubbed, a “high-tech war” against China.
Now that such frivolities and appeals to moralism have been abandoned, it comes down to whether the U.S. and its allies can form an alliance on the issue that could crush China’s high-tech industry.
But this is a complex question since it’s not only about countries bending to U.S. fealty but business deals with a number of complex forces, such as politics, the laws of the market and the interests of individual companies
In this regard, China holds a tremendous advantage. Because of what will be a staggered and complex mobilization by the U.S. and its most stern allies, this gives China time for independent research and development. This will in turn diminish confidence that Washington’s objectives can be achieved, given the pushback already seen and the fact that companies such as Huawei are making significant progress in developing nanochip technology. And in terms of the market, the most significant demand is in China – which historically has driven advancement.
But there will still be growing pains. China’s manufacturing capabilities are several generations behind other markets, but strides have been made. And with increased enthusiasm from Beijing, it would not be long before China reintegrates with the global chip supply chain. But in the end, it will have exposed Washington’s aims for what they are: a desire to keep other nations subservient. This will harm Washington’s global credibility and put a streak of fear in even its closest allies. –CGTN