Trump is an arrogant US President, surrounded by like-minded & inexperienced, hawkish yes-men in global trade matters, besides other areas of importance. His Administration appears to subscribe to a new "demo-crazy"; turning Trump's "Great" philosophy into "Making U.S. Dead". Trump has unfortunately not realised that governing a country is unlike being a manipulating & crafty business Czar that he was. Recently, during their White House visits, President Macron of France and Chancellor Merkel of Germany were unable to convince Trump to change his mind on several important issues, as he stubbornly lives in his "world of his uncompromising business dreams". Sad for the US ..... However, China, EU, ASEAN and other countries should continue to be involved in pragmatic global trade and investments among themselves, sans the US for this present time.
Trade War with China
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After all these, one would think the Chinese have wisened up. But no, they still continue to depend upon American and western suppliers for critical technology components, especially for commercial use, until they are banned or blacklisted by the U.S Government. Rather than simply being a reactionary player, the Chinese government and companies should take proactive measures to start developing evrey single critical technology components 'in-house'.
You don't know how hitech industry works. All established players have big portfolio of patents. If ZTE sells products with a domestic component that violates a US patent in the US, the patent holder can ask the courts for an import injunction and fine.
All the more reason to be a 'trailblazer' rather than a reactionary.
Hendrik_2000
Lieutenant General
They did try in 1990 but the result is mixed due to lack of market and capital, technology and talent. But now they should have all the ingredient for successful semiconductor industry. Here is timely article onthe subject
Why Can’t China Make Semiconductors?
After decades of failure, it may now be on the right track.
By
Adam Minter
April 29, 2018, 6:39 PM CDT
How hard can it be? Photographer: Daniel Acker/Bloomberg
Jack Ma says he's for China to make semiconductors at home. It's a longstanding goal for the Chinese government. And thanks to a recent on certain technology exports by the U.S., it's now a critical one. The question is whether China can finally conquer this challenge after decades of failures.
Semiconductors are the building blocks of electronics, found in everything from flip phones to the servers that make up a supercomputer. Although China long ago mastered the art of making products with semiconductors produced elsewhere (the iPhone is the most famous example), it wants to move beyond being a mere assembler. It aspires to being an originator of products and ideas, especially in cutting-edge industries such as autonomous cars. For that, it needs its own semiconductors.
That's no small challenge. China is currently the world's biggest chip market, but it manufactures only 16 percent of the semiconductors it uses domestically. It imports about $200 billion worth annually -- a value exceeding its oil imports. To cultivate a domestic industry, the government has slashed taxes for chip makers and plans to invest as much as to become a world leader in design and manufacturing. Yet as history shows, spending won't be enough.
China's earliest semiconductor was built in 1956, not long after the technology was invented in the U.S. But thanks to the turmoil of the Cultural Revolution, whatever momentum its engineers and scientists had was soon lost. When the country reopened for business in the 1970s, officials quickly realized that semiconductors would be a key part of any future market-based economy.
Almost from the start, though, central planning proved to be a serious impediment. Early government ideas included importing secondhand Japanese semiconductor lines that were outdated before they were even shipped. Expensive efforts to build a domestic industry from scratch in the 1990s faltered due to bureaucracy, delays and a lack of customers for the kind of chips China was making.
Another weakness was a lack of capital. For decades, labor-intensive industries -- such as assembling mobile phones -- were the route to riches in China, attracting investment from entrepreneurs and bureaucrats alike. Making semiconductors, by contrast, requires billions in up-front capital and can take a decade or more to see a return. In 2016, Intel Corp. alone spent on R&D. Few if any Chinese companies have that capacity or the experience to make such an investment rationally. And central planners typically resist that kind of risky and far-sighted spending.
China seems to recognize this problem. Since 2000, it has shifted away from subsidizing semiconductor research and production, and toward making equity investments, in the hope that market forces could play a larger role. Yet funds continue to be misallocated: Over the past 18 months, there's been a spate of government-juiced in semiconductor plants, many of which lack sufficient technology. Those that eventually open will likely contribute to a glut in memory chips, spelling financial trouble for the domestic industry.
But perhaps the biggest long-term challenge for China is technology acquisition. Though the government would like to develop an industry from the ground up, its best efforts are still one or two generations behind the U.S. A logical solution would be to buy technology from American companies or form partnerships with them. That's the route by cutting-edge firms in Japan, South Korea and Taiwan.
Yet China can't do the same. Its efforts to American semiconductor companies (often at huge premiums) are regularly blocked for security reasons. Japan, South Korea and Taiwan have put Chinese acquisitions under similar scrutiny. By one , China has made $34 billion in bids for U.S. semiconductor companies alone since 2015, yet completed only $4.4 billion in deals globally in that span.
Despite these impediments, China has actually made substantial strides in recent years. Companies such as Shanghai-based Spreadtrum Communications Inc. are designing semiconductors for mobile phones and other technologies, then outsourcing production to foreign plants. Meanwhile, China's considerable investment in factories that make older technologies has provided managers, engineers and scientists some crucial lessons in how to run a semiconductor fabrication business.
None of these efforts will provide the shortcuts that government officials -- and Jack Ma -- seem to want. But they might offer the building blocks for an industry that China has spent half a century trying and failing to create.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
The challenge is that everybody is moving forward. The current players (US, Japan, SK) are moving forward as China is trying to catch up. Unless China moves faster, China can not catch up. There is no reason to believe the current players will slow down. And the key here is that, China can not wait for domestic substitutions to be ready. ZTE can not wait for some domestic electro-optical component to be ready to build 4G or 5G network in China or any other market. If that substitution takes 4 years to be ready, that will mean they loose 4 years, by then 5G is out, 6G is there. Waiting for "in-house" to be ready will equate to killing ZTE and Huawei.
The reality is that Chinese vendors like ZTE or Huawei have to use whatever components available while in the mean time Chinese component makers playing catch-up. And when ZTE and Huawei does pick the Chinese components, these components MUST be on par to their foreign counterparts, not necessarily better but close enough to not make much performance difference.
Think about Chinese aircraft engine development, it is the same.
My opinion ... the Chinese is moving much faster in learning & implementing Hi-Tech products/equipment. Most University Professors in the US & Europe know that their Chinese students have always been very hard working and yearning for knowledge. Silly for anyone to think that the Westerners are only ones privy to hi-tech. China has woken up ..... Napoleon Bonaparte was quoted in saying about China: "Let the Dragon sleep, for when it gets up .....". My add on ....."the world will gasp in wonder & envy".
Hendrik_2000
Lieutenant General
From New york times. No cave in to the us demand for high tech subsidy
China Is Set to Take a Hard Line on Trump’s Trade Demands
By APRIL 30, 2018
A half-dozen senior Chinese officials and two dozen influential advisers laid out the Chinese government’s position in detail during a three-day seminar that ended here late Monday morning. The officials and most of the advisers at the seminar gave an overview of China’s economic policies, including an in-depth review of the country’s trade policy, to make sure China’s stance would be known overseas. All of the officials and most of the advisers at the seminar insisted on anonymity because of diplomatic sensitiviti
It is not clear what will happen when the two sides sit down this week or whether either will find a reason to waver. Still, the Chinese and American positions are so far apart that China’s leaders are skeptical the two sides can find common ground by the end of this week. They are already raising the possibility that Chinese officials may fly to Washington a month from now for further talks.
“I don’t expect a comprehensive deal whatsoever,” said Ruan Zongze, the executive vice president of the China Institute of International Studies, which is the policy research arm of China’s Foreign Ministry. “I think there is a lot of game playing here.”
Beijing is frustrated with Mr. Trump’s threats to impose tariffs on $150 billion in Chinese goods and dismayed by suggestions in the West that China has a weak bargaining position. Chinese officials think the country’s one-party political system and President Xi Jinping’s enduring grip on power — particularly after the repeal of presidential term limits in March — mean that China can outlast the United States and Mr. Trump in any trade quarrel.
The Chinese government believes Mr. Trump’s background as a businessman means that at some point he will agree to a deal. Seminar participants also reaffirmed previous Chinese trade policy offers to further open the country’s financial and automotive sectors, though not in ways that would impact China’s industrial modernization program, called Made in China 2025. They also suggested that China would be willing to tighten its intellectual property rules so as to foster innovation within China as well as protect foreign technologies from counterfeiting and other illegal copying
China is insisting that the parameters of any negotiations be limited, and that the tariff threat be removed before a final deal can be struck
Chinese officials have reached out to Treasury Secretary Steven Mnuchin, who has reacted positively to China’s overtures in the auto and financial sectors. Mr. Mnuchin, a former Goldman Sachs executive who will be on the Trump administration’s team in Beijing later this week, has sought to calm investors worried that the rhetoric between Washington and Beijing could break out into a full-blown trade war.
China Is Set to Take a Hard Line on Trump’s Trade Demands
By APRIL 30, 2018
A half-dozen senior Chinese officials and two dozen influential advisers laid out the Chinese government’s position in detail during a three-day seminar that ended here late Monday morning. The officials and most of the advisers at the seminar gave an overview of China’s economic policies, including an in-depth review of the country’s trade policy, to make sure China’s stance would be known overseas. All of the officials and most of the advisers at the seminar insisted on anonymity because of diplomatic sensitiviti
It is not clear what will happen when the two sides sit down this week or whether either will find a reason to waver. Still, the Chinese and American positions are so far apart that China’s leaders are skeptical the two sides can find common ground by the end of this week. They are already raising the possibility that Chinese officials may fly to Washington a month from now for further talks.
“I don’t expect a comprehensive deal whatsoever,” said Ruan Zongze, the executive vice president of the China Institute of International Studies, which is the policy research arm of China’s Foreign Ministry. “I think there is a lot of game playing here.”
Beijing is frustrated with Mr. Trump’s threats to impose tariffs on $150 billion in Chinese goods and dismayed by suggestions in the West that China has a weak bargaining position. Chinese officials think the country’s one-party political system and President Xi Jinping’s enduring grip on power — particularly after the repeal of presidential term limits in March — mean that China can outlast the United States and Mr. Trump in any trade quarrel.
The Chinese government believes Mr. Trump’s background as a businessman means that at some point he will agree to a deal. Seminar participants also reaffirmed previous Chinese trade policy offers to further open the country’s financial and automotive sectors, though not in ways that would impact China’s industrial modernization program, called Made in China 2025. They also suggested that China would be willing to tighten its intellectual property rules so as to foster innovation within China as well as protect foreign technologies from counterfeiting and other illegal copying
China is insisting that the parameters of any negotiations be limited, and that the tariff threat be removed before a final deal can be struck
Chinese officials have reached out to Treasury Secretary Steven Mnuchin, who has reacted positively to China’s overtures in the auto and financial sectors. Mr. Mnuchin, a former Goldman Sachs executive who will be on the Trump administration’s team in Beijing later this week, has sought to calm investors worried that the rhetoric between Washington and Beijing could break out into a full-blown trade war.
Jura The idiot
General
just checking
Déjà vu
Yesterday at 12:28 PM
OK LOL
Yesterday at 2:53 PM
Déjà vu
Yesterday at 12:28 PM
(another thread)
OK LOL
Yesterday at 2:53 PM
They did try in 1990 but the result is mixed due to lack of market and capital, technology and talent. But now they should have all the ingredient for successful semiconductor industry. Here is timely article onthe subject
Why Can’t China Make Semiconductors?
After decades of failure, it may now be on the right track.
By
Adam Minter
April 29, 2018, 6:39 PM CDT
How hard can it be? Photographer: Daniel Acker/Bloomberg
Jack Ma says he's for China to make semiconductors at home. It's a longstanding goal for the Chinese government. And thanks to a recent on certain technology exports by the U.S., it's now a critical one. The question is whether China can finally conquer this challenge after decades of failures.
Semiconductors are the building blocks of electronics, found in everything from flip phones to the servers that make up a supercomputer. Although China long ago mastered the art of making products with semiconductors produced elsewhere (the iPhone is the most famous example), it wants to move beyond being a mere assembler. It aspires to being an originator of products and ideas, especially in cutting-edge industries such as autonomous cars. For that, it needs its own semiconductors.
That's no small challenge. China is currently the world's biggest chip market, but it manufactures only 16 percent of the semiconductors it uses domestically. It imports about $200 billion worth annually -- a value exceeding its oil imports. To cultivate a domestic industry, the government has slashed taxes for chip makers and plans to invest as much as to become a world leader in design and manufacturing. Yet as history shows, spending won't be enough.
China's earliest semiconductor was built in 1956, not long after the technology was invented in the U.S. But thanks to the turmoil of the Cultural Revolution, whatever momentum its engineers and scientists had was soon lost. When the country reopened for business in the 1970s, officials quickly realized that semiconductors would be a key part of any future market-based economy.
Almost from the start, though, central planning proved to be a serious impediment. Early government ideas included importing secondhand Japanese semiconductor lines that were outdated before they were even shipped. Expensive efforts to build a domestic industry from scratch in the 1990s faltered due to bureaucracy, delays and a lack of customers for the kind of chips China was making.
Another weakness was a lack of capital. For decades, labor-intensive industries -- such as assembling mobile phones -- were the route to riches in China, attracting investment from entrepreneurs and bureaucrats alike. Making semiconductors, by contrast, requires billions in up-front capital and can take a decade or more to see a return. In 2016, Intel Corp. alone spent on R&D. Few if any Chinese companies have that capacity or the experience to make such an investment rationally. And central planners typically resist that kind of risky and far-sighted spending.
China seems to recognize this problem. Since 2000, it has shifted away from subsidizing semiconductor research and production, and toward making equity investments, in the hope that market forces could play a larger role. Yet funds continue to be misallocated: Over the past 18 months, there's been a spate of government-juiced in semiconductor plants, many of which lack sufficient technology. Those that eventually open will likely contribute to a glut in memory chips, spelling financial trouble for the domestic industry.
But perhaps the biggest long-term challenge for China is technology acquisition. Though the government would like to develop an industry from the ground up, its best efforts are still one or two generations behind the U.S. A logical solution would be to buy technology from American companies or form partnerships with them. That's the route by cutting-edge firms in Japan, South Korea and Taiwan.
Yet China can't do the same. Its efforts to American semiconductor companies (often at huge premiums) are regularly blocked for security reasons. Japan, South Korea and Taiwan have put Chinese acquisitions under similar scrutiny. By one , China has made $34 billion in bids for U.S. semiconductor companies alone since 2015, yet completed only $4.4 billion in deals globally in that span.
Despite these impediments, China has actually made substantial strides in recent years. Companies such as Shanghai-based Spreadtrum Communications Inc. are designing semiconductors for mobile phones and other technologies, then outsourcing production to foreign plants. Meanwhile, China's considerable investment in factories that make older technologies has provided managers, engineers and scientists some crucial lessons in how to run a semiconductor fabrication business.
None of these efforts will provide the shortcuts that government officials -- and Jack Ma -- seem to want. But they might offer the building blocks for an industry that China has spent half a century trying and failing to create.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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