US’ extreme pressure can’t contain China’s tech companies

By Wei Jianguo Source: Global Times Published: 2020/9/24 9:29:51

The Kunpeng 920 chip, among other server chips, showcased at Huawei Beijing research center. Photo:CGTN

Not hesitant to use national strength to suppress Chinese technology companies, the US has cut chip supply or enforced bans on Huawei, WeChat, TikTok, SMIC, etc. But can the US really achieve its target of suppressing the development of China's high-tech companies and digital economy through "excessive force?"

In fact, the strategic goal of the US is to use five years to bring down Chinese high-tech companies and digital economy, so that American companies can quickly follow up and even surpass Chinese companies during the period. Therefore, the chip supply cuts and app bans are only the beginning, and China needs to prepare for long-term confrontation. 

While Washington's arbitrarily bullying of Chinese companies has spooked the world, its excessive crackdown that has gone to extreme lengths caused counterproductive results instead.

For starters, US stocks, especially financial stocks and technology stocks, have suffered a round of losses recently, and some have fallen by more than 9 percent. Many companies, especially American companies, find it unacceptable.

Secondly, as US chip makers are banned to supply Chinese companies, there are no other companies from other countries to fill the gap left by their Chinese clients. These US chip makers have been put in an increasingly tight spot. These companies can only jointly write letters and lodge complaints with the US government. On the one hand, these US companies require the US government to delay the issuing of the ban, and on the other hand, they hope to reach some agreements during this period.

Thirdly, even American judges can't accept such arrogant and unreasonable practices of the US government. A US judge in California halted the Trump administration's ban on downloads of the Chinese-owned app WeChat on Sunday. The US judge raised many legal issues, which involves the interests of American users and companies.

These unexpected counterproductive results signal that the US is on the very brink of the abyss. If the US stubbornly insists on continuing to suppress Chinese tech companies, there will be only two ways for it, and neither is good. The first way is to strike Chinese companies even with collateral damages. The current number of WeChat downloads in the US reach 19 million, and TikTok has 17 million users among young Americans. If a government uses administrative order to ban these applications, it will cause fierce resentment among current users, which could hurt Trump's vote bank.

The other way is to stop US companies' from developing globally. The development of US high-tech companies has become very global, especially like Facebook, which has 2.7 billion global monthly active users, but only 10 percent of them are from the US. If the US tries to use bans to restrict internet applications, it will eventually harm American companies. If Facebook is not used in the world, its active users will be greatly affected, and it will be US companies that will suffer catastrophic losses.

At present, the reason why the US hates Chinese tech companies so much is because these companies have created two miracles: the first is the miracle of speed, the second is the miracle of influence.

And it's also because of these two miracles that make the US' extreme means to contain China's tech companies are bound to fail and the US can only go with the trend to cooperate with China. 

When the US realizes the seriousness of collateral damage come from its extreme crackdown, it will realize that such brutal and unreasonable suppression is unwise and will in turn lead to opposition from American users, and companies.

Therefore, I suggest that under the current circumstances, Chinese companies must be calm, patient and resilient. And the US should keep a clear head, rein in the precipice, and take a path of China-US cooperation in technological innovation.

The author is a former Chinese vice minister of commerce and executive deputy director of the China Center for International Economic Exchanges.


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