There is nothing either good or bad but thinking makes it so.
This is a business story.
What that means is Ren Zhengfei the boss will say only one thing:
Do your job.
News on China's scientific and technological development.
- Thread starter Quickie
- Start date
This is a business story.
What that means is Ren Zhengfei the boss will say only one thing:
Do your job.
It is great. China worried too much about the US maximum pressure tactics. As much as people claimed that Trump is irrational and desperate, it doesn't mean China can't retaliate.
Like I said letting the US picking you one by one is the worst case scenario. By going after so many companies at the same time, it would actually make the sanctions less effective.
All those Taiwan, Japan, and US companies have made a ton of money from China and Chinese companies. They thought they could come out unscratched. Maybe not, as Trump seems to go after everyone and anyone.
The collateral damage is extensive, and no one at this moment can get a handle on yet.
One, companies outside of China, may have lost a lot of business in the near term. Then two, the same companies may never regain that lost business but also have competitors emerge from China they have to compete with next, after the near term ends.
What then?
(more sanctions)
I don't think you realize how bad the situation is for China. Carl Zha is talking about secondary sanctions, which means anyone that sells SMIC gets sanctioned too. So, no more korean parts or any other companies.
China extremely dependent on Korean, Japanese and other companies for various parts of the chip industry including high grades chemicals and gases. I hope you remember the whole Japan banning Korean companies from buying high grade chemicals. That started a huge trade war between the two. If US puts secondary sanctions then that company is crippled. Because most of the chip industry is dominated by a few western or western vassal country companies. China doesn't own the entire supply chain yet.
There is only one way for China to stop this, which is to have entire supply chain from scratch. Which will take a long time. If China goes for piece by piece and depends on the foreigners on any parts or chemicals then they can be cutoff by US.
There is another option for China, which is to put its own secondary sanctions on companies that follow US sanctions. Anyone that doesn't sell to Huawei will NOT be able to sell to any Chinese companies or any company operating in China. That will cause a huge disruption since Apple and most companies rely on China to produce their devices. So, its essentially leveraging China's own dominance in the supply chain to stop the drip by drip killing by US.
But China will not do that, they will not jeopardize their existing manufacturing base to save Huawei or SMIC. So, they can only watch them die while investing on getting entire supply chain of Chips from scratch.
China is in huge trouble. US can also put financial sanctions on these companies which will cripple them even further. If US puts dollar payment sanction on Huawei, then its finished. It cannot sell to any other country with dollar. It cannot deal with any foreign company that deals with US.
Now that US decided to use its entire leverage, China will see massive reduction in its companies access to other companies for imports and exports. They will have to keep their head down, swallow these attacks while focusing on investing in the whole industry.
It will probably cause a slowdown in Chinese GDP growth to survive the US decoupling onslaught. It will ofcourse hurt US too and will certainly be beneficial for China in the long run, since they will become self sufficient. But it will be extremely painful and China will have to sacrifice their GDP growth for at least 10 years and invest all that money into self-sufficiency. Otherwise they are doomed.
This is the biggest Challenge facing China. Whether they make it or not is not sure. But this the white-european-cultural-financial hegemony using their full advantage built up over the last 3 centuries of colonialism and domination. China will have to essentially eat grass to be able survive this. Or they will collapse or stagnate.
I know what the source of this is. Don’t read too much into it.
The biggest "x factor" in the analysis is that it misses the determination of the chinese people. I was born in china, and remember a time when my family only ate meat once a week in china, since that was all that we afford. Now I make +$200,000 a year in Canada. Obviously the average chinese doesn't make as much as me, but I am sure that if I am willing to live subsistent wages or go back to eating meat once a week so that china gets into the long-haul civilizational struggle of eating grass for 10 years, I'm sure my true compatriots back home would have no problem at all.
There are actually plenty of items in the chinese arsenal which have not yet employed which will devastate the US. Without resorting to a PPE ban (which I find morally challenging), china can just simply impose an export ban on apple or other products. I don't mean a sanction on Apple sales in china, I mean preventing iphones from leaving a factory to go to the US. All this shit about decoupling and moving supply chains from china, it can't be done in one day, which is all thats needed to block shipments from ports. Obviously it would also mean huge losses (perhaps millions of unemployed chinese workers) but things just run out in your average store in the US. Tell the US voter that.
If the US is every stupid enough to go for the jugular of china, china will be the mad dog that can strike back. Chinese people don't need someone to tell them of hardship, we have lived through it in our lifetimes, not through some stupid history book. Look how long the US has been trying to strangle Iran, Venezuela, and North Korea, and none have collapsed (although they certainly arent doing well). China is more powerful than all 3 of those countries combined by at least a factor of 10. China also doesn't need to revert to full Aturky, there is still intermediate markets from which to get certain deficiencies in technology even under a full scale american onslaught. Also, china still pays lip service to the US IP regime, but if US went full all out, china will just start directly cloning anything which is physically on the mainland at any time. The US semiconductor design software stranglehold of china with "Synopsys/Cadence" is only so much a stranglehold as china permits.
Al
Also one more thing ignored is that Chinahas get to make any game changing moves I.e. rare earth, complete demanding the debt to be paid back etc etc. Also the biggest thing to watch for is that the USA is making all these stupid moves, in the middle of a pandemic (that they are losing badly in) where the average people have lost their jobs for good (50 million and going up) along with the price of goods going up like crazy ( due to non stop money printing causing inflation to go up) and they have have tariffed many countries around the world ( like there allies in Europe and Asia even). If these moves are made in a good time, yes it will hurt China a fair bit but right now in the worse possible time, China can live with out the super conductor chips for a few months while they do research and such to catch up( heck this pandemic has given the incentive to actually invest in such things and they are making strides in the field) but should the USA run out of supplies at this time (since they are draining the food banks having to feed 50million people a week that have no jobs) and if they don’t get any more government funding (Trump have recently halved the stimulus package) they would simply be f()&&ed beyond recovery since the government seems to be trying his best to kill there own people. Right now until the election, the worse is yet to come for the USA and China can sit back and watch the USA destroyed if self with one trump screw up at a time (recent debacle with the post office which is really messing everything up since not only this is a clear to mess with the election but this messes up the economy even more (due to people not receive bills/payment/medicine though the mail)
AssassinsMace
Lieutenant General
Ironic because I saw Ian Bremmer on a YouTube video taking about the technological Cold War between the US and China and he rhetorically asked which country do you want in control of your supply chain? The US or China? His romantic assumption is the US while blindly ignoring that the US is abusing its power right now with what they can only use stereotypes and prejudice of what China may do in the future. Trump is calling Americans to boycott Goodyear just because they're banning wearing clothing with political messages at work. The contradiction is the US acts like money is nothing yet his trade war is all about thinking the world is robbing the US. The US has plenty of money if they think nothing will happen to the US economy. It like coronavirus, the Republicans are saying it's nothing yet they seem to look to blame China for something that's nothing.
I do remember but I also notice that Korea has turned to China to procure those chemical.
Understandably, many China naysayers believe it would take over a decade for China to overcome the US sanctions. However, I dont agree with this assertion. Huawei planned to operate a 45nm fab before year end. Even though I am not certain Huawei would achieve its goal, I do believe Huawei has conducted a feasibility assessment that it is possible. Therefore, SMIC might get crippled by the sanction in the high end chips but it should still be able to find a way to produce lower end chips much quickly than Huawei.
As for financial sanctions, it isnt something that anyone has control over. Let just say cutting China off from dollars would have reverberation for the whole world and for decades. Trump would face a tanking stock market that even his friends couldnt prevent from collapsing.
Dude you forgot the original meaning of money. What is money in the first place? It originates from barter trade, give and take. I give you a cow for maybe you give me 3000 kg of rice.
Back before money was invented, if you have no output, you wont get anything. It just happen a medium of exhange is a necessity and that is why we have money.
If for example, if the US will block dollar payments to chinese companies or to all China altogether, just find another way for medium of exchange. After all trade is barter of goods and services.
It would be even more practical say 1 build a railway in brazil, if exchange of x amounts of soy beans or iron ore. This is even more pronounced with the rumored $400B china iran deal. China will build a series of infra, defense etc projects in Iran in exchange for discounted oil to China for 25 years and whats more, Iran will even give a port for China to operate for decades. We see, Iran is already cut off from USD payment system, yet trade still continue.
US dollar is just one of medium of exchange. Humanity has even tried shells, stones as money aside from the time tested gold and silver. If those korean or japanese companies to thrive, they will be forced to trade other than US dollars.