Devastating impact of Huawei ban on US high tech industry and US economy
The devastating impact of the Huawei ban on US high tech industry and the US economy in general.
1/ Qualcomm loses a big chunk of its chip business, ie, 8bn$/yr. The initial plan according to Navarro was for Huawei to die a horrible quick death and then the hyenas of Silicon Valley swiftly move in to dismember and finish what remains of Huawei by a discounted buy-out and then resume dealings with Qualcomm. The way things go, looks like Qualcomm loses business, that's all. No aftermath.
2/ The dream of every company is to create indispensable products to the consumer, to create a sort of addiction/dependence impossible to be substituted on the market. The US Huawei chip ban destroys such dependence, rather it enforces severance, not only applying to Huawei, but to all Chinese companies buying from America.
In order to get prepared for coming sanctions, one might as well get rid of all made in America. China's nationwide trend of voluntary decoupling started when ZTE and Huawei were sanctioned.
China has already provided alternatives to apps like Android, GPS, Microsoft windows etc thought to be unreplaceable before. It's a question of time that all US products find alternatives on the China market. This is called preemptive alternative. The Trump Admin is destroying the addictive lure of Made In America, the American economy will literally be self sanctioned out of existence.
3/ The US high tech needs a big market to amortize the cost of research and development. Without China the biggest market to absorb cost and prop it up with huge profit, lifeline of US high-tech industry, the latter will shrivel and decline very quickly.
5/ High tech patents need to be predicated on strong manufacturing capability to mass produce and capitalize. The decoupling will take away China's manufacturing capability from the US patents, thus rendering the latter sterile.
6/ US, the dirtiest country in the domain of cyber security is pushing for a worldwide Clean Network initiative to form an ally against China. Not sure how persuasive the US could be with their dirty record.
Also not clear how the US will implement this given Nokia and Ericsson use Chinese equipments too.
Cyber security is the bane of US Internet companies, all of which allow backdoor accesses to NSA as revealed by Edward Snowden and further openly acknowledged by themselves.
That's where China's opportunity lies. Huawei provides its source code upon request and signs no back door statements with severe penalties in case of violation (I assume not applying if CIA hacks and plants its backdoor? 😂 which it did untill 2014).
Though the propaganda has it otherwise, Huawei is a lot more secure and cleaner than US internet companies. None of which dares to disclose its source code and sign no backdoor agreement. The so called national security threat arises from the fact that Huawei doesn't cooperate with NSA to allow backdoor or worse carry out spying on its behalf like Facebook.
Pompeo's move also prompts China to adopt corresponding measures to neutralize notorious security threats posed by American apps and equipments by removing them, something it didn't openly do before for fear of antagonizing the US.
7/ Initially the threshold for Huawei ban was 25%, ie, only applying to products >25% of the components come from the US. Now it's enlarged to 0.000001%, ie, any company using dollars or gmail etc can't do business with Huawei, making it a worldwide ban.
We witness an absurd situation where one Chinese company can't sell to another Chinese company because of the US sanction.
The reaction to such a ban is a trend for those high tech companies reliant on China market to cleanse itself of the American elements, ie, dollars, technology, US services, apps etc. In the long run, the damage is huge.
Now using dollars and relying on other American elements is perceived as poisonous to business, not facilitating business. Not sure how this will contribute to the dollar supremacy in the long run.
8/ Huawei and Tiktok are two of the most successful Chinese companies. All Chinese gain a sense of pride via their tremendous international success.
Attacking maligning these symbols of Chinese pride will only unleash righteous indignation on the part of the Chinese people.
Attacking China's high tech is not standing with the Chinese people. It's not wanting success for the latter. It serves as an undermining campaign desecrating the excellent brand image America enjoyed in China hitherto. Not sure how this will help the American business in the long run.
9/ The cold war unilaterally started by the US has just begun. The Chinese government is caught unprepared at the extreme short-sightedness of the Trump , not to say its downright stupidity. It hasn't taken any measures of retaliation as of yet.
When Trump attacks Chinese companies, does he have the fate of Apple, Microsoft, Qualcomm etc in China in his mind ? The US acts like a rogue. It's difficult to stay a gentleman when dealing with a rogue.
The initial face of the cold war is the US attack on Chinese high-tech. This will undeniably precipitate the downward spiral of the American empire in multiple ways.
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