By: Syrializm Analytics
Continuing the talk about the Sino-US confrontation, we’re entering today in the most dangerous and most sensitive part of this conflict in its economic part.
We cannot in any way talk about the economy without going into the subject of commercial companies, which is the pillar and the basis of states and world’s economy in general.
China is the world’s largest country in terms of the number of commercial enterprises with different specialties.
The number of companies registered in China is about seventy seven million six hundred thousand company, according to the statistics of the Chinese Ministry of Commerce and Industry.
Among these companies are technology companies, led by Huawei, the company that is under a fierce attack by United States.
What is circulated in the media that the United States accusing Huawei with three specific charges:
- The Chinese company’s attempt to circumvent US sanctions against Iran, which is a charge that requires sanctions under US law.
- Acquiring patents for foreign companies (as described by the US illegally) and stealing technologies from European and US companies.
- Espionage in favor of the Chinese government.
Of course, Huawei denies all these charges, addressed to it by the US administration, and continues to ask the US administration for a very simple request: to present proofs that we as Huawei did what we were accused of … just so simply.
Of course, the Chinese company is known to operate in many international markets, and therefore the company has demanded proof that it has spied in any of the countries in which the company operates.
Of course, as is the case with US administrations, the United States hasn’t provided any evidence that the Chinese company has been charged with any of these accusations, especially espionage charges.
But there is no need to provide evidence as US politicians openly state that Huawei’s charge is in short that it’s a Chinese company, and China is a rival and enemy of the United States.
Therefore, it’s impossible for the United States or any of its allies in the world to place their national security in the hands of a Chinese company operating in a very sensitive and dangerous field, the ICT sector!
The United States has imposed number of sanctions on the Chinese company, to prevent dealing with it, ban the purchase of technology or services to and from the company, impose a ban on financial transactions and enter into projects in the United States or in other allied countries.
The company’s response was firm and at all levels, especially by officials and the Chinese government, which supports and stands with Huawei in the face of this fierce campaign against it.
The remarks made by the director of the company, Ren Zhengfei, were the most recent.
He said that “we were preparing for this day, you cannot use force and target our company”.
The company started to respond in various ways, both legal and judicial in US courts and through entering into direct negotiations and discussions with the US government.
The threat of the Chinese company to search for alternatives so that the suspension of the company’s deal with many Chinese companies in the United States to large losses in those companies, especially with the possibility that the follow-up Chinese companies successively follow the example of Huawei and thus lose US companies the largest market and one of the largest customer, which means a drop in sales and a decrease in the chances of continuing the activities of many of these companies.
This means that fatalities will be directed to US IT companies in the medium and long term, which will negatively affect the US economy itself, as US technology and communications companies are one of the most important pillars of the US economy, which is strength and steady the American power.
Huawei has announced that it will replace the reliance on the Android operating system on its own devices.
It’ll replace the hardware components it purchases from more than US $ 15 billion a year from other US companies and even develop these components themselves or with the help of other Chinese or international companies.
For its part, the Chinese government has entered into a confrontation by threatening to impose sanctions and prevent American companies from working in China.
It is also certain that it will move to other business sectors, becoming a comprehensive economic trade war.
Here comes the Chinese threat to the United States to stop selling one of China’s most valuable assets, the so-called “The 17 rare-earth elements”.
It’s a group of rare metals and components available in China.
These materials are involved in many advanced industries such as aerospace, automotive, glass, electronics, and weapons, and many other industries.
Where China produces about 70% of these components:
Cerium (Ce), Dysprosium (Dy), Erbium (Er), Europium (Eu), Gadolinium (Gd), Holmium (Ho), Lanthanum (La), Lutetium (Lu), Neodymium (Nd), Praseodymium (Pr), Promethium (Pm), Samarium (Sm), Scandium (Sc), Terbium (Tb), Thulium (Tm), Ytterbium (Yb), Yttrium (Y).
The United States relies heavily on the importation of these materials as well as being one of the main sources of many important industries in the United States, and therefore if the United States imposed sanctions on China, China will respond in various ways, including the prevention of selling these materials to the United States.
All of the above is what is going on, however, the actual reasons are that the Chinese company is engaged in the field of ICT, which provides services and equipment and provides technological equipment for high quality infrastructure at very low cost.
In addition, Huawei, a Chinese nationality company, unique in the development of infrastructure and equipment for the 5G of the Internet.
The US fear of Huawei is not because it produces smart phones, which is not important, as Huawei’s market share of the smart device market within the United States is relatively limited.
The danger is the 5G, its equipment and infrastructure.
Huawei excels in this field, making it the only company that offers these technologies the best quality and lowest cost.
And of course who has the advantage in this area, will control very briefly the entire components and joints of the economy of the twenty-first century.
It’s the economy of the Fourth Industrial Revolution, the technology industry revolution that relies on a high-tech, interactive technology life that needs Internet speeds of more than 20 times current.
The keys to the economy of the twenty-first century in its entirety are in China’s hands.
If the United States leaves room for exclusivity, action and entry, it will provide China with the keys and instruments of China’s control over the United States and even the world.
All this will increase China’s power at the expense of the United States, and therefore it is working on the United States to block China’s progress.
China’s rapid development has not yet been absorbed by the United States.
Of China’s GDP of 178 billion in 1980, Japan’s GDP in the same period was $ 1.5 trillion, and the US GDP in the same period was more than $ 2.6 trillion.
Today China’s GDP is $ 14.4 trillion, while current US GDP is about $ 21 trillion.
Only 40 years was enough for China to jump that huge jump.
With a vision of extending to 2025, China is now fully in control of the manufacturing and development of the entire 5G, with all its technologies, equipment and infrastructure, controlling the service providers in the world.
In short, the idea is not a war of economic conflict but a struggle for existence.
Even Huawei itself, the target company, who follows the history of the company notes the similar history and timeline of its growth with what happened in her home country, China.
Huawei, founded in 1987, didn’t appear as a trade name in the information and communication technology sector until after 2000, when it was not very weighty and no one even heard its name.
Huawei today, is the second company in the field of manufacturing smart devices in the world and operates in many countries in the world, and has provided many countries of the world equipment and construction of local internet and telecommunication networks with the all hardware and equipment.
The company also ranks first in the number of patents it has submitted in the field of information technology.
Today, the company’s revenues reach $ 107 billion and seek to reach the top of the world of information and communications technology, a field where competition is almost exclusively between China and the United States, with small presence with other countries such as India, Japan and south Korea, to name a few.