World politics after the US ban on selling chips to ZTE

3 min read
semiconductor research at Tsinghua Unigroup in Beijing i

China would return to 2G telecom if there were a total ban of selling chips by the Western countries to this developing country, according to an analyst in Hong Kong, because China’s self-developed attainments in this sector still lag behind in terms of decades.

It is absolutely correct to say that the ZTE chip crisis is “self-inflicted because it flouted an embargo on US components sold to Iran and then tried to cover up the wrongdoing.”

The U.S. Commerce Dept “banned American firms from selling parts to China’s ZTE Corp for seven years” with immediate effect on April 17, 2018.

ZTE Corp, one of the major Chinese telecoms makers, relies on importing American electronics and chips from Intel, Micron, Broadcom, Microsoft and Oracle for its final products, and if no solution can be reached within weeks, it could collapse.

An exclusive Reuters analysis report ponders whether it will give a stronger push to China to “accelerate plans to develop its domestic semiconductor market … China already wants locally-made chips inside 40 percent all smartphones in the domestic market by 2025.” This view is also shared by some other tech analysts.

It is easier said than done. In 2017, China’s import of chips amounted to USD260 billion, more than double of crude oil. There is no ground to justify a wishful thinking that, in the coming 20-30 years, China is able to elevate its technological telecom level high enough to match with the advanced American and European grades, as the latter will keep on making superb progress.

With this background, we can envision at least three issues in International Relations.

Firstly, this event confirms my view that Trump can win his trade war easily. Furthermore, it will widen the economic and political divergences between them. We need to prepare for some more unpleasant events in future, and one after one the US-China relations would get worse. I still hold the forecast that Washington would irritate Beijing to the extent that it will be forced to take military actions against Taipei before 2025.

Secondly, the cleavage between China’s Belt and Road Zone and the OECD Zone will deepen. The former would focus on affordable goods and services as well as the areas in which the OECD group is not yet in the leading position, such as renewable energy, artificial intelligence etc. Disorder, disconnection, chaos or the like between these two zones would happen somewhere somehow.

Thirdly, Beijing will turn to, highly selectively, a few Western powers for assistance in realizing certain technological big-leap upgrades. Observers have to pay more attention to the interactive dynamics between China and some European nations. The global Left-Right struggle and the West/Rest antagonism, though not covered here, may play a dramatic role in transforming certain nations’ perception of China in the coming decades.

The world order has been changing since the early 21st century not simply because of China’s emergence, but also owing to an ideological transformation inside the West (e.g. AA Moazzam: “Glorification of ‘self’ (Western civilisation) at the expense of the ‘other’ eight civilisations) was inherent in Huntington’s Clash of Civilizations thesis; and other studies by Edward Said, Mark Salter, Iver Neumann … ).

The opinions expressed are those of the author, and not necessarily those of China Daily Mail.

Tony Simon

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