In my last post, I have posted about a potential trade war between US and China. The recent ban resulting ZTE may longer purchase American hardware and software for the next 7 years. This ban will definitely mean that even if ZTE manages to source parts of the phone from non-us manufacturers, they may no longer sell Android phones in the west because google has the monopoly on their Android app store.
While the punishment by the US’ commerce dept is harsh, China’s State-owned Assets Supervision and Administration Commission (SASAC) has been equally critical of how ZTE handling this situation. However, this ban is really about the deployment of 5g technology that is coming soon. Huawei and ZTE has been the primary targets of western governments and are blamed for ‘spying,’ despite there is lack of proof. In fact, in one of Edward Snowden leaks, it was revealed NSA’s operation “ShotGiant” used an exploit in Huawei’s networking equipment and spied on the Chinese.
Between Huawei and ZTE, Huawei was more cautious in entering the American market, they concentrate in European and Asian markets. ZTE was more foolhardy and decided to put most of their eggs in the US market and now is punished horribly. At least for now I do not believe that other Chinese phone makers like Motorola, Alcatel, and Oneplus are not the target of US’ wrath because they don’t produce telecom equipment.
But should China be worried? Many in China pointed yes and it is not the first time that the US government try to stop China leapfroging the US over technology. In 2015, the US government banned the Chinese government from buying Intel Xeon Processors so it can prevent China supercomputer effort. The result? China has produced the TaihuLight Supercomputer and created a supercomputer without American technology. Recently, Alibaba and Tencent announced a similar effort to wean away from American Technology.
What will happen in the next few years? I will guarantee that we will see less “Made in America” parts in Chinese technology. This will certainly be very interesting over the next few years.