To address its own and country biggest weakness, Huawei must advance its chip manufacturing.

tower9 · May 18, 2019

gelgoog said:
@tower9 I'm going a bit off-topic here but it is a lie that only China earned out of the relationship. The whole point of the US granting those conditions to China in the first place was to isolate the Soviet Union. Only later did it become about increasing corporate America's profits via globalization. As for why the average US citizen profited less from it, there was also abject poverty in Victorian England at the height of the Empire. An Empire is not just necessarily bad for foreign countries. It can treat its own citizens quite miserably. US citizens live in those conditions precisely because of the huge resources funneled into the tools of Empire like foreign wars, rather than investing in its own people.
There are plenty of other countries with similar economic relations with the US, yet why did China rise to this degree while many others failed? Take South America. It is a basket case. You can't ignore the tremendous amount of resources and drive the Chinese put to get to their current position.

Of course as China's economy grew it was rather obvious they would lose some of the favorable trading conditions they had. This should have started happening over a decade ago I think. But what the Trump administration is doing is trying to shackle China into a position of subservience towards the US rather than treating it on an equitable basis.
The way the US is going about it was always going to face friction against China because of their experience with the unequal treaties and how that period is perceived in China. China is not willing to be put into a position of subservience. Nor will they allow the country to be fractured like what happened to the Soviet Union. China would rather put itself into abject poverty first. That's why Xi was put into power with an unlimited term.

I agree that the US has also benefited from the relationship. But what the US has benefited is nothing in comparison to how China has benefited. China today is in a completely different universe compared to what it was before.

If the US never engaged China, it would probably have a smaller GDP and its consumer products would be more expensive, but its dominance in the world would be unquestioned. It would still be the first world, advanced nation that it is.

Global politics is about relative power. In this way, the US has shot itself in the foot by engaging with China and allowing so much access to its resources to China.

And absolutely that is what Trump is doing. And it is COMPLETELY LOGICAL. Why would a dominant power allow a subversive power an opportunity to challenge it. Think about it? WHY?

gelgoog · May 18, 2019

tower9 said:
The scale back doesn't impact what is hurting Huawei. The scale back only allows past customers of Huawei, including some rural areas, to continue to get replacement parts for their Huawei products in the mean time. It doesn't reverse the ban on Huawei getting new components from the US.

So it doesn't change anything. If China, and Huawei, is unable to replicate the US portion of their supply chain within the next 1-2 years, it will be screwed.

That news report only shows how poorly thought out the measures the US took against Huawei were. Imagine what will happen to places like Europe where Huawei actually has a much larger footprint. This has the potential to tremendously backfire on the US.

tower9 · May 18, 2019

gelgoog said:
That news report only shows how poorly thought out the measures the US took against Huawei were. Imagine what will happen to places like Europe where Huawei actually has a much larger footprint. This has the potential to tremendously backfire on the US.

I don't think it was poorly thought out. I think people need to stop several assumptions here, that Trump cares about America's corporate line. It doesn't. He's the first US president to not give a damn about corporate America, he is a pure Nationalist.

His purpose is to foment chaos and disrupt China's growth. The pain to the US economy and corporations will be less than the pain that China will feel. His ultimate goal is to disrupt China's momentum, especially with the 5G roll out.

All this talk about how the US is hurting itself is weak sauce. It ignores the ultimate reality that if China is able to become a 5G hegemon, it will control the direction of AI and it will dominate the tech fields of the FUTURE. Why will the US want this? It will make the US second fiddle to China and allow China to dictate things to the US.

Look at how China bullies weaker countries, do you think the US wants to be in that position? Yeah, I agree, the US is a complete asshole in its foreign policy, but that's the thing, China is also a bully, so why would the big bully want to allow the little bully to become stronger than it is?

What the US is doing is the most logical thing it has done in a very very long time. What is NOT LOGICAL is for the US to continue to cooperate with China like it is a partner.

Weaasel · May 18, 2019

tower9 said:
Yep. All this is true. Trump is a symptom though of the US coming to terms that it's influence is declining. Trump is the embodiment of the US lashing out in anger at those they believe are surpassing it.

China should stop believing that they can compromise or come to a deal with the US. They need to realize that China is now public enemy No. 1 and the US will do whatever it can to knee cap China in every way, shape or form. Now, what's China going to do about it? So far, the responses have been pretty wimpy. It seems like China's only good at bullying smaller countries but it acts like a wimp in front of the strongest country, the US. Look at how it's dealt with the kidnapping of Meng, it's just been lashing out at Canada while still playing nice with the US. China is pretty cowardly actually. Russia wouldn't be acting this way. Russia actually has balls.

The Chinese did not believe that the Americans would spite their face by cutting of their nose, and making major US Tech companies lose their share of the domestic market. China did not pursue comprehensive state of the art high tech R & D much earlier than it has largely because of this.

Now it should be absolutely clear that the United States is pursuing full scale economic warfare on China and trying to bully others to go along with it, and it has a lot of influence on those others.

It is not too late for China to rally and it is not as though China is completely bereft of high tech capabilities. It must both develop them further and apply them a lot more than it has. And it might even be necessary for China to even more brazenly violate patents to produce high tech goods, especially capital goods, for the domestic market if it can do so.

China must also in time replace a large share of current exports to the United States with exports elsewhere, but especially for the domestic market. Exports as a share of the GDP must reduce significantly still yet, accelerating the trend that is already existing. Cut taxes and reduce the extent of infrastructure spending, especially unnecessary ones, as a means of boosting domestic consumption and still not significantly reducing state revenue. Yes, China does still need to upgrade and modernize its infrastructure. But major and mid tier Chinese cities already possess a lot of highly modern infrastructure of transportation, telecoms, electricity, water supply and sanitation etc.

tower9 · May 18, 2019

Weaasel said:
The Chinese did not believe that the Americans would spite their face by cutting of their nose, and making major US Tech companies lose their share of the domestic market. China did not pursue comprehensive state of the art high tech R & D much earlier than it has largely because of this.

Now it should be absolutely clear that the United States is pursuing full scale economic warfare on China and trying to bully others to go along with it, and it has a lot of influence on those others.

It is not too late for China to rally and it is not as though China is completely bereft of high tech capabilities. It must both develop them further and apply them a lot more than it has. And it might even be necessary for China to even more brazenly violate patents to produce high tech goods, especially capital goods, for the domestic market if it can do so.

China must also in time replace a large share of current exports to the United States with exports elsewhere, but especially for the domestic market. Exports as a share of the GDP must reduce significantly still yet, accelerating the trend that is already existing. Cut taxes and reduce the extent of infrastructure spending, especially unnecessary ones, as a means of boosting domestic consumption and still not significantly reducing state revenue. Yes, China does still need to upgrade and modernize its infrastructure. But major and mid tier Chinese cities already possess a lot of highly modern infrastructure of transportation, telecoms, electricity, water supply and sanitation etc.

China never expected this because it was lulled by four decades of America being ruled by corporate neoliberal presidents, instead of an actual nationalist. Also, China has never been on the precipice of overtaking the US until now. This is the perfect storm, China is on the verge of overtaking the US, and the US just elected a true nationalist as president. What do you think will happen?

I think for China to continue relying on critical US high tech components at this point, it is ritual suicide. Plain and simple.

Weaasel · May 18, 2019

tower9 said:
Anyways, I think the ban on Huawei is just the start. If China doesn't capitulate and humiliate itself in a self-harming trade deal with the US that will be a second Plaza Accord, expect complete US bans for China's entire high tech industry, including ban on the sales of robotics, chips, components, that will bring China's manufacturing and tech industries to a crash.

It will hurt the bottom line of these US companies, but the pain will be nothing compared to what China will feel, and that is Trump's ultimate desire. It will give the US some time to retain its hegemony.

China is not lacking in terms of money, but China has 1.4 billion people and is facing likely complete economic warfare and a demand for capitulation. There must be a few people who in China actually possess the knowledge or can figure out the means to replicate or come close to replicating in quality the gamut of high tech goods and categories that you mention and are not mentioned. If China has the means of brazenly violating patents to replicate high tech capital goods and components and keeps their usage and sales only for the domestic market it should do so THIS VERY MOMENT!

tower9 · May 18, 2019

Weaasel said:
China is not lacking in terms of money, but China has 1.4 billion people and is facing likely complete economic warfare and a demand for capitulation. There must be a few people who in China actually possess the knowledge or can figure out the means to replicate or come close to replicating in quality the gamut of high tech goods and categories that you mention and are not mentioned. If China has the means of brazenly violating patents to replicate high tech capital goods and components and keeps their usage and sales only for the domestic market it should do so THIS VERY MOMENT!

Yeah, I agree. I don't know if China has enough to replicate these high tech supply chains, but it might. It definitely has the capital, the main challenge is securing the insider knowledge. It might be able to replicate some of these components immediately, but not sure if it is able to do all of it.

Anyways, China really has 1-2 years to do this. Otherwise it will be a massive disaster. The US has a sword looming over China's head. I think that is the main message Trump is sending.

SURRENDER OR YOUR HEAD IS OFF.

Weaasel · May 18, 2019

tidalwave said:
Notice my thread is specifically about Huawei . not China in general because only huawei has the scale to make a difference.
Some of Semiconductor makers in China has products but not many customers and therefore cannot keep up. SMEE the only China semiconductor equipment that produces commercial grade lithography equipment but they achieved only 90nm and cannot further develope mainly lack of customers. Recent academic research group in Sichuan used different approach for lithography but they are not ready yet for commercial level production

But if Huawei is the one involved in equipment industry then it can attempt use its own equipment for manufacturing. I think the key. if something developed and no one used then its going nowhere.

The highly advanced lithographic equipment produced by the Chinese Academy of Sciences must be mass produced quickly.

China and Chinese must realize that the US is prepared for all out economic warfare and as such the state must be fully prepared to assist critical high tech entities and more than double down on Made in China 2025.

tidalwave · May 18, 2019

tower9 said:
What the US is doing is the most logical thing it has done in a very very long time. What is NOT LOGICAL is for the US to continue to cooperate with China like it is a partner.

Why US ask cooperation for fentanyl?
US wants to deleverage just do it.

Why so much US government complaint when China touch US tech companies inside China?
What's up with constant arm twisting to China to table to sign agreement?

Too much BS.

If you are a champ, you need to able to take it as well as dishing it out.

This is all very ILLOGiCAL to me when US supposedly doing the deleverage, or having nothing to do with each other.

Gatekeeper · May 18, 2019

gelgoog said:
@tower9 I'm going a bit off-topic here but it is a lie that only China earned out of the relationship. The whole point of the US granting those conditions to China in the first place was to isolate the Soviet Union. Only later did it become about increasing corporate America's profits via globalization. As for why the average US citizen profited less from it, there was also abject poverty in Victorian England at the height of the Empire. An Empire is not just necessarily bad for foreign countries. It can treat its own citizens quite miserably. US citizens live in those conditions precisely because of the huge resources funneled into the tools of Empire like foreign wars, rather than investing in its own people.

There are plenty of other countries with similar economic relations with the US, yet why did China rise to this degree while many others failed? Take South America. It is a basket case. You can't ignore the tremendous amount of resources and drive the Chinese put to get to their current position.

Of course as China's economy grew it was rather obvious they would lose some of the favorable trading conditions they had. This should have started happening over a decade ago I think. But what the Trump administration is doing is trying to shackle China into a position of subservience towards the US rather than treating it on an equitable basis.
The way the US is going about it was always going to face friction against China because of their experience with the unequal treaties and how that period is perceived in China. China is not willing to be put into a position of subservience. Nor will they allow the country to be fractured like what happened to the Soviet Union. China would rather put itself into abject poverty first. That's why Xi was put into power with an unlimited term.

Absolutely, to minimise the benefits US got from the associations with China is unfair.

To say the relationship only benefitted US "corporate bottom line and cheap consumer goods" doesn't show the whole picture. While at the same time benefitted China greatly, showed not only lack of understanding, but lack of respect for China's OWN efforts in lifting millions of people out of poverty.

Let me start by saying all country have INTEREST, and when the relationship began 40 years ago, it was because it was in the US interest! Period!

It was in the US interest that US can use China to counterweight the Soviets.
It was in the US interest to have a vast pool of EDUCATED workforce willing to work and get paid one twentyth of US workforce, thus providing cheap goods to the US consumer. In doing so, have kept US inflation low, leading to higher growth rate (some economists estimate that US economy could be as much as a third smaller if it wasn't for the sweats of the Chinese)!

And as for corporate America benefitting, well, the corporate taxes have fueled US economy and its defence industries.

So while I agreed that US at the moment is only acting in its own interest to stop a rival from overtaken it.

We must also acknowledge that the past 40 years, the US has also acted in its own interest, and not out of any friendship or goodwill in helping China!

To address its own and country biggest weakness, Huawei must advance its chip manufacturing.

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