2018, a struggling but inspiring year for Chinese tech giants

By Chen Qingqing Source:Global Times Published: 2018/12/27 18:56:26

A resident walks through a Huawei store in Changzhou, East China's Jiangsu Province in October.

Chinese technology companies have become much more anxious about the business environment in 2018, compared to previous years.

Earlier this year, the US government banned American companies from exporting components to Chinese telecoms equipment provider ZTE Corp, as it allegedly lied to the US government about disciplining employees who violated US sanctions against North Korea and Iran. The Shenzhen-based company is the second-largest firm of its kind in the country, and the US ban led to its near-collapse. I have been covering this incident for nearly a month, and talked with ZTE staff and industry experts, who considered the incident as the country's Sputnik Moment.

It is widely believed that the US ban could be catastrophic to the Chinese company, as 30 to 40 percent of its components are imported from the US.

Since then, more academic meetings focused on how to develop chip self-sufficiency in the wake of the US export controls. A think tank affiliated to the Chinese Ministry of Industry and Information Technology also organized a roundtable session after the ZTE dilemma to take a deep reflection on the incident and urge accelerating development to catch up with advanced technologies.

Over past few years, I have traveled to Shenzhen, South China's Guangdong Province, which is also considered as the new Silicon Valley, several times.

Each time, I could feel the energy of the booming local industries. Engineers at major technology companies work more than eight hours a day, and sometimes sacrifice their spare time to work on extra projects.

However, no matter how the outside world describes China's tech miracle, the ZTE disaster inspired public awareness that China is still falling behind the US in some strategic sectors.

Semiconductor has become a regularly mentioned word, even for those who understand little about the industry. After attending a conference held by Huawei Technologies in Shanghai, I felt the eagerness of Chinese players to invest more in core technologies and reduce their reliance on the US.

Huawei unveiled a new artificial intelligence (AI) chipset in September to challenge the US firms including Qualcomm and Nvidia amid rising competition between China and the US in the field. When its rotating CEO Xu Zhijun pledged that the company is committed to adapting to revolutionary changes, the audience cheered and applauded, which impressed me about the confidence and enthusiasm they have when facing strong competition.

Some may say, 2018 was a struggling year for Chinese technology companies, as the arrest of Meng Wanzhou, Huawei's senior executive, at the beginning of December has cast shadow over the already difficult China-US relations.

But I see it as an opportunity for Chinese engineers and scientific researchers, who have been working hard to make progress under the intense pressure of the US government. 

China has huge market scale, a huge consumer base and huge growth potential. The Chinese government is determined to develop cutting-edge technologies including AI, core chipset and robotics in the foreseeable future.

Companies like Huawei, ZTE and Alibaba are often considered as successful Chinese companies that "go global."

And like their foreign counterparts, including Apple, Google and Facebook, they are surrounded by challenges and controversies all the time.

"Calm down and carry on" will be the best way for them to concentrate on their core business and catch up with the US in the China-US technology race.

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