The administration of US President Donald Trump has insisted that the arrest of Huawei Technologies Co (華為) chief financial officer Meng Wanzhou (孟晚舟) has nothing to do with trade talks. In Beijing, it is just the latest US move to contain China’s rise as a global power.
Bail hearings proceeded this week after Meng was arrested in Canada on Dec. 1 for alleged breaches of US sanctions against Iran. The case threatens to derail a trade truce struck the same day between Trump and Chinese President Xi Jinping (習近平).
Even if the leaders manage to strike a broader deal, the arrest shows that the US-China conflict goes far beyond trade.
The world’s biggest economies are now engaged in a battle for global influence that will ultimately determine whether the US remains the globe’s predominant superpower or whether China rises as a viable counterweight.
A bipartisan consensus has emerged in Washington that China’s entry into the WTO hollowed out US manufacturing and allowed it to grow rich. That increased economic power is now at a point where it risks eroding key US military advantages around the globe.
China insists it plays by the rules and does not challenge US dominance.
TECH PROWESS
A year ago, the White House identified China’s growing technological prowess as a threat to US economic and military might. US companies have long argued that China forces them to transfer intellectual property and sometimes steals trade secrets — all of which Beijing denies.
In justifying tariffs, Trump’s team has cited Beijing’s “Made in China 2025” strategy to become a global leader in state-of-the-art technologies from aerospace to robotics.
China has resisted those demands, arguing that doing so would crush its economic potential.
Huawei in particular epitomizes the threat. Earlier this year, Trump blocked Broadcom Inc’s US$117 billion hostile takeover bid for Qualcomm Inc over concerns that Huawei would end up dominating the market for computer chips and wireless technologies.
The fear is that wireless carriers might be forced to turn to Huawei or other Chinese companies for 5G technology, potentially giving Beijing access to critical communications.
Those concerns have prompted the US to ban Huawei’s products for government procurement, and Australia, Japan and New Zealand have reportedly followed suit.
China has fought back, with Chinese Ministry of Foreign Affairs spokesman Lu Kang (陸慷) saying on Monday that Huawei does not “force any enterprise to install forced back doors.”
“The competition is really focused in the areas where future strategic and economic dominance come from,” said Michael Shoebridge, director of the defense and strategy program at the Australian Strategic Policy Institute.
BELT AND ROAD
Last year, Xi called his Belt and Road Initiative (BRI) to finance infrastructure and development projects across the globe the “project of the century.”
Morgan Stanley said that as much as US$1.3 trillion might be lent out under the policy by 2027.
With a backlash growing across Asia from Malaysia to the Maldives, Xi is playing defense: Last month he told the APEC summit that it was “not a trap as some people have labeled it.”
The US has grown increasingly concerned that poorer countries might become economically dependent on China. The Pentagon earlier this year said that China could use ports around the globe to support naval deployments.
Sri Lanka is a prime example of what could go wrong. It borrowed heavily to build a port on the Indian Ocean, could not repay the loans and then gave China a 99-year lease for debt relief.
“For the US, the BRI is a direct challenge to its pre-eminence in the Asia-Pacific region and beyond,” said Brahma Chellaney, professor of strategic studies at the New Delhi-based Center for Policy Research. “They realized that countries that are looking to BRI need an alternative. That’s why they are developing a counter to it.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts