The New U.S.-China Rivalry: A Technology Race
nytimes.com
nytimes.com
Qualcomm and Broadcom make closed source basebands, which are used (backdoors) and abused (zero-day exploitation) for spying via wireless ISPs on behalf of their respective parent governments.
If Broadcom acquires Qualcomm, it may become easier for some governments to locate firmware vulnerabilities which can either be fixed to prevent U.S. surveillance or exploited to expand local surveillance powers.
https://www.pcmag.com/news/359702/us-broadcom-qualcomm-merge...
Specifically, the last paragraph,
"Broadcomm added that most of its board of directors and senior management team is made up of Americans. It also contends that the company's plan to buy Qualcomm will no longer fall under CFIUS's review when Broadcom finishes relocating to the US."
It seems CFIUS wants solid assurance that this happens so the US can continue scooping up all the communications of everyone world wide.
The US government didn't appoint Qualcomm winner of the LTE market with IP protections just to let them sell it off to a company outside US control.
* Broadcom is a Singaporean company, not Chinese.
* The article asserts that Huawei and other Chinese chip manufacturers will indirectly benefit from the proposed merger.
* Cfius, who is looking closely at the Broadcom-Qualcomm proposed deal, looks closely at other investment / merger deals from China for national security reasons.
.... and most readers will at this point incorrectly assume that Broadcom is a Chinese company, having forgotten what was read in the first 3 paragraphs.
Definitely something to keep in mind when reading pieces like this.
I worry when the FBI Director claims all Chinese student organizations are under suspicion because they have evidence that one university student club accepted donations from an embassy in order to fund a Chinese New Year party. Can you imagine if a student organization supporting American students studying abroad was deemed suspicious because the US Embassy bought them a turkey or two at Thanksgiving?
no imagination needed. In Russia the organizations accepting foreign resources (private or public doesn't matter) must register as "foreign agents".
Let's not draw a moral equivalence between US surveillance and Chinese surveillance. Chinese surveillance is explicit, and profoundly more invasive and pervasive than the US's. It's also explicitly used as a political tool - to enforce the will of the party, not the state. These are extremely critical differences that it is irresponsible not to continually and stridently point out. What China is doing to its citizens is infinitely more frightening than anything the NSA has ever done.
As someone who grew up in the US and has experienced racism, I fear where this campaign could lead. Here, we have an article about a Singaporean company trying to take over a US company. And the entire narrative is about China.
10+ years. NYT is at the frontier of American propaganda, as we saw with their Iraq lies following 9/11
Yes, I did actually read the article (unlike many commenters going on about China this or China that), which is why I found the title misleading, since Broadcom isn't even a Chinese company. I'm glad that the other commenter linked to that article because that author doesn't forget to remind the reader "However, Broadcom is not a Chinese company."
> The proposed acquisition by the Singapore-based Broadcom would have been the largest deal in technology history, creating a major force in the development of the computer chips that power smartphones and many internet-connected devices.
I mean, if the company is a Singapore-based company, then how is the author not reminding us it isn't Chinese? Broadcom is only mentioned twice in the article, so a 50% reminder rate isn't that bad.
> The clash erupted in public on Tuesday after the United States government, citing national security concerns, called for a full investigation into a hostile bid to buy the American chip stalwart Qualcomm — a review that is often a death knell for a corporate deal.
And the end of the third paragraph:
> But a government panel said the takeover could weaken Qualcomm and give its Chinese rivals an advantage.
If the US government panel wasn't making a fuss over this, the NyTimes would have nothing to report. The author is actually reporting the facts that exist (US concerns over this acquisition with a focus on China), they aren't making these facts up.
If you want to criticize about why this article is all about China, your beef is with the US government panel, not the author of this article.
Do you think you would be more surprised, less surprised, or about the same, if the situation were reversed? Let's try a thought experiment.
Hypothetically, say, a Singaporean company was trying to take over a Chinese company (both companies in this case have Chinese citizen executives), and the Chinese government was trying to block it. And let's say there's news coverage apropos of nothing, that American companies would be the indirect beneficiaries, so the US was (wink, wink) behind it all. What is your level of surprise then?
¯\_(ツ)_/¯
A thought experiment where you swap one variable and see how it sounds reversed is a very useful tool for detecting cognitive bias. Cognitive bias is a major source of racism. Racism is something I experienced growing up here, and one of my chief worries when reading articles like this.
China's history of innovation over the also decades is also a story of supplementation by pervasive, state-sanctioned corporate espionage and theft of intellectual property from the rest of the world. If China continues on its current path, I can see actions by nation-states to boost their defenses against espionage and IP theft by China.
In reality the CPC are technocrats in every sense of the word. Many of them are engineers and they possess an engineer's faith in innovation. The idea of them squashing innovation is silly. Look at the enormous investments in electric cars, AI, mobile computing and genetic engineering. Westerners will deny it until it's way too late but the amount of innovation going on in China right now is mind blowing.
Which is the point -- the Chinese will more than likely win this technology "race." Because the West isn't really competing. The days of Western governments pouring real wealth into research and development is over. What you have is very few highly innovative firms and a few military contractors competing against the highly coordinated political-economic-military complex of China. The outlook does not look good.
I suspect this is why ultimately companies like Apple and Microsoft and even Tesla are so focused on getting a foothold into China. These guys know where the future is and they want to be at the table when it happens.
Under the tightening grip of surveillance in China today, and the centralization of power by the president and his "anti-corruption" campaign against the party and businessman, I don't see how innovation will persist. If the president and his party allies get entrenched, then I do not see how the party can stay a meritocracy, and without that meritocracy, I don't see how innovation won't get squashed.
Edit: thank you for removing the word baseless.
The seemingly limitless amount of capital, technological, human and otherwise has led to this arms race of sort, but will both countries be able to focus on this if there's a significant crisis? How much of this stuff is just a bubble?
Firstly, the very low interests rates in the US and worldwide the last decade provide very limited room for governments to reduce cost of capital. Current fed funds rate is 1.42% after being essentially 0% since 2009. In 2007, the rate was 5.25%. In 2000 before the dot com crash, fed funds rate was 6.51% (dropped to nadir of 1% by 2004). [1]
Unless interest rates rise dramatically before the next recession, the US govt will have the least monetary policy ammunition ever to respond to a recession. So there may not be that much reduction in cost of capital.
Perhaps more importantly, any further fiscal tightening in advance of a recession could be very destructive to venture capital. One of the reasons VCs have so much cash now is that investors are chasing yield -- with govt debt at all time low rates (meaning high prices), and negative interest rates for some major governments, and with the stock market in one of its largest bull markets ever, investors have been investing into ever riskier asset classes. the laws of finance state than when interest rates go up, bond prices fall, and stock prices fall as well [2, 3]. yield will become cheaper (ie you can get higher return for lower risk: imagine getting 5% from a government bond today, and an expected return of 8-10% for large cap stocks: no one would invest in super risky VC in hopes of maybe 12-15% returns). with attractive returns available for lower risk, investors will cycle away from investments like VC and towards large cap stocks and bonds
that's the theory, and in reality you observe a contraction in VC after recessions (post 2000s, post financial crisis). then capital leaves the VC space, so deals are less competitive and prices are lower, and the VCs that stick around make lots of money, then other people try to get in on the VC returns, prices go up again, returns go down, and the cycle goes on
[1] https://fred.stlouisfed.org/series/FEDFUNDS [2] https://www.investopedia.com/investing/how-interest-rates-af... [3] https://www.investopedia.com/terms/c/capm.asp
As for the magnitude, I can't really speak to that much. Perhaps someone more knowledgeable will chime in.
Clearly the two giant governments are battling over control of the closed source baseband backdoors in all mobile devices.
Also - by securities law you're required to report and even make a bid for the business once you cross a certain threshold of ownership.
That's all conjecture from me, but it seems to make sense from basic principles.
My hope is the US' next president will be one that cares deeply about civil rights and will start calling China out in the future, as its human rights abuses inevitably increase under a dictator with all-seeing surveillance eyes.
EDIT: Removal of previous question since posters have interpreted it as trolling (though I assure you, it was not).
Yes, yes it does. You don't have to be a saint to point out bad behavior.
Sure, but no one is making that claim.
Your second question suggests that one should recap decades of human rights abuses.
Finally, by stating "Not everything is a battle, you know", you seek to make it a battle when no one else is.
This is all classic troll behavior.
[1] http://english.gov.cn/archive/publications/2017/03/09/conten...
I believe that was said in jest during a speech at a charity dinner.
The part about having a President for Life in the US was definitely presented as a joke, though Trump's admiration of "strong" leaders has been a recurring sentiment.[The Atlantic]
[NR]: https://www.nationalreview.com/2018/03/donald-trump-xi-jinpi...
[CNN]: https://www.cnn.com/2018/03/03/politics/trump-maralago-remar...
[The Atlantic]: https://www.theatlantic.com/amp/article/554810/
Good HN discussions on large, divisive topics are not generic but specific, and engage with the actual content of an article. More on this if anyone wants it: https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...
Trump really seems to have a hard on for wannabe dictators like Erdogan, Putin and now the Chinese guy. Hard to understand.
You'll hear qualms about trade unfairness and the occasional blatant copyright/knockoff culture, but hardly ever any mention of human rights.
There is just no way someone is going to move from LA or New York to Beijing. Maybe Hong Kong. The differences in living standards is huge, I don't think you could pay people enough to get them to move.
China has plenty of its own talent and has been attracting back those who went overseas. While I agree that they will need to attract worldwide talent in the long run to fully compete with the USA, they are not in a bad place ATM.
And not sure if you have been to China but outside pollution, they have very good living standards of you have the income, though obviously this is subjective to what is important to you. But say for example, go stand on the Bund in Shanghai. It feels like London meets NY in China.
Well, they have a 1.4 billion pool to draw from, from themselves alone.
>There's a reason why their military and space hardware is Russian or Russian-derived.
Because they're starting out on those things. But their stuff at least works -- analogous us endeavors of late have been failing after spending tons of money (F35 for one).