They started the trade war before it even began by not allowing key US companies with market access...Pretty sure they blacklisted Google and Facebook well before we blacklisted Huawei.
Huawei was put in the Entity list. That means two things.
1)Huawei can't sell any equipment or phone in the US. It's about market access. It's equal to Google/Facebook were denied to access the Chinese market if they don't obey the censorship policies. Huawei was also denied to access mainstream America market for a long time.
2)Huawei can't buy any components and services from any American companies. Even Google & Facebook are not accessible in China, they still have lots of business there.
So basically, Putting Huawei in the Entity list almost means to kill Huawei because Chips from American companies are important for their supply chain. It's not only about market access.
That's the reason many people in China feel very angry.
Seems pretty silly to me. China's barring of US enterprises from selling in China is dramatically more damaging at scale than US blacklisting Huawei.
There was even a numbered list to help you out with it.
Saying that there's more harm done by blocking Facebook inside China than there is by trying to eliminate Huawei worldwide... well, I'm already on record downthread calling that attitude colonialist.
I suppose, if it backfires and causes Huawei to successfully develop a competing OS, you'll be sort of right.. although I think intentions should count for something.
What he didn't include was the relative damage from these different motions which was my expansion on it. Feel free to add more to the discussion than "what he said was well laid out".
Not sure if you're being intentionally disingenuous or not but China hasn't blocked just Facebook from operating in China. They've blocked US enterprises whole hog except where they had no alternative. On a level playing field where US enterprises had equal access to China as Chinese enterprises to the US, the proceeds would be dramatically larger than that of the single enterprise that is Huawei.
Call it "colonialist" or whatever dirty word you want to paint the US as evil, it's hard to look at the way China has operated from an economic POV and not have expected retaliation at some point.
If Huawei and other Chinese enterprises develop their own OS, it will be comically difficult if not impossible for it to compete on the worldwide stage unless it's focused on being compatible with existing apps. Network effects are real. Android has minimal threat.
Try walking through a mall in Shanghai it Beijing some day, and try saying this again. American companies and brands are everywhere. They don't have to drink Starbucks - it would be perfectly possible for a Chinese company to brew coffee - but they do.
> it's hard to look at the way China has operated from an economic POV and not have expected retaliation at some point.
They've provided cheap labor to American corporations, boosting those companies' profits. They've allowed their labor force to be massively exploited by Western companies, with the understanding that they themselves would be able to eventually move up the value chain and live on a level closer to people in the developed world.
The reason for the "retaliation" is that there is a circle of people in American politics that cannot accept the United States being eclipsed by another power. This is about geopolitics. An established power fears a rising power, and is moving to try to cripple the rising power while there's still time.
Regarding your point about the "against US economy" or "against China economy". Maybe you are in a war mindset. If we jump out this "war" mindset, we can see "China's barring of US enterprises from selling in China" is really not about against the "US economy". It's about censorship.
1) There are many US companies which are very successful in China, Qualcomm, Apple, Nike, Starbuck, etc. Actually, I rarely heard any stories about the market access problem for non-internet companies in China.
2) There is a "forced IP transfer/partnership" issue in some sectors, for example, the auto sector. It is very unfair. But the result of it is also very complex. I will address it in a separate post.
3) The market access issue of many internet companies, such as Facebook/Google, is about censorship policies. Google operated in China several years ago, but it withdrew from the market because of the censorship requirements from the government. Apple complies with the requirement, so it works well in China. I didn't mean "Censorship" is a good thing. I just mean as far as I can understand, it's about "censorship", not about "against US economy".
"Magnitude of impact": Could you explain more about this point?
You can differentiate mindsets or not but it's clear that the actions are taken to cause disadvantage for the other and advantage for themselves in both directions.
As someone who has been a part of multiple enterprises that have considered entering the Chinese market and would have not had any reason to be censored (nothing to censor), I can tell you that that's just not the case at ALL. China erects as many barriers to entry for foreign companies as possible. You yourself address that directly with regards to the forced IP transfer/partnership point. Many (most? speculatively) of the companies that are successful in the Chinese market are successful due to China having no reasonable alternative (Qualcomm, Intel, AMD, etc.).
When I talk about the magnitude of impact, I'm trying to compare say the entire loss of Huawei with the lost sales of US companies were they able to enter the Chinese market as easily as Chinese companies may enter the US market. Huawei is tiny on that relative scale.
Yes, I agree that many of them are successful because they have tech advantages and there are no good alternatives as you pointed out. However, there are also many successful non-tech US companies in China. They have/had good alternatives. Here are some brands jump in my mind: Many products from Procter & Gamble Co, Coca Cola/Pepsi, Pizza Hut, Nike, Adidas, Walmart, Ford, KFC/McDonald, Starbucks, Subway.
From my experience in both the US and China, I guess there are far more successful US brands in China than successful Chinese brands in the US. Yes, the US imports more from China, but many products are US brands.
//China erects as many barriers to entry for foreign companies as possible. //
I also agree that business barriers for foreign companies in China are higher than they are in the US. Overall, the US is among the most business-friendly countries.
However, we need to put it into a bigger context. According to the ease of doing business index https://en.wikipedia.org/wiki/Ease_of_doing_business_index The US ranks in the 8th and China in 46th.
1) Doing business in China is harder for both Chinese local business and foreign business than it is in the US. This is the big picture. Especially when you are from the US, you may be very frustrated with some non-sense requirements for doing business in China. Many private local companies also face the same non-sense stuff, but because they understand the environment better, they may come up some tricks to work around the issues.
2) I totally understand that you have a bad experience about the barriers. From my experiences and my friends' experiences, the business-friendly-index for different kinds of business: State-owned companies > Foreign companies > Local private companies in many sectors. The least advantage one is the local private companies. Many local governments are competing for attracting foreign business to boost the local economies. They don't care about small local private business.
// When I talk about the magnitude of impact, I'm trying to compare say the entire loss of Huawei with the lost sales of US companies were they able to enter the Chinese market as easily as Chinese companies may enter the US market. Huawei is tiny on that relative scale. //
Maybe you are right about the impact. However, it's really hard to say the impact of the "protect state-owned companies" policies is a good impact on the Chinese Economies. From the economics point, the "state-owned" companies are very inefficient. It may cause far more damage to the overall Chinese economy.
Another point to see the impact is about the psychological impact: Killing Huawei to people in China is like Killing Apple for people in the US. Its psychological impact is far more than some business barries.
Don't get me wrong, China did it well to carve back it's status and didn't get colonized by US, but sooner or later the other parties naturally get angry if piggy-backing goes too far. It's the same in friendship, if your friend is mean once doesn't matter, but if he always take away more then what he is giving then the relationship will break down eventually.
Google hesitated to enter China because of the censorship requirements (1) but eventually entered anyway, led by a researcher they hired away from Microsoft, Kai-Fu Lee (1, 2). They exited because they caught the Chinese associates stealing source code, and only after their first "war room" effort to nail down exactly what was going on (1, 3).
(1) https://www.amazon.com/Plex-Google-Thinks-Works-Shapes/dp/14...
(2) https://www.cio.com/article/2425034/head-of-google-china-lea...
https://www.spiegel.de/international/business/google-co-foun...
Brin: I don't think it's a question of taking on China. In fact, I am a great admirer of both China and the Chinese government for the progress they have made. It is really opposing censorship and speaking out for the freedom of political dissent, and that's the key issue from our side.
SPIEGEL: Four years ago, you allowed your service to be censored. Why have you changed your mind now?
Brin: The hacking attacks were the straw that broke the camel's back. There were several aspects there: the attack directly on Google, which we believe was an attempt to gain access to Gmail accounts of Chinese human rights activists. But there is also a broader pattern we then discovered of simply the surveillance of human rights activists.
"Second, we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. "
I would say similarly if China decides to limit their production of rare earth metals.
All's fair in love and war, of course, but I tire of the moralizing from people who don't know any history.
Us govt is forbidding Google from SELLING them licensing and support.
It's an effort to cripple Huawei in non us markets.
You see anyone trying to bring iPhone production back to America? Where was your kitchenware made? Your toaster?
This isn't about us markets, it's about global power politics.. and likely more than a little about personal interactions that Trump has had.
The CCP disallows foreign companies to participate in the market until the IP is in Chinese hands. This is global power politics, and has been going on for many years.
You will lose against China unless you implement full reciprocity. This should go far beyond Huawei, it should hit every Chinese company.
And the same should be true for Boeing, Airbus, US farmers and pharma companies. Alas, we don't live in a fair world, so Huawei is a start.
Counterpoint on the broader prescription: Mercantilist systems are historically way less stable. They brought us WWI. Then the cold war brought us dozens of bloody proxy wars.
Maybe there's a win-win possibility instead? I'd contend that if we could do a better job of sharing the pie on our side, we could take the profits from trade and not have a pissed-off middle class electing demagogues.
Now it turns out that the Chinese have been profiting from this, often by illegal means and on a basis that exactly isn't free trade and competition.
So what do you tell your voters if you are the Donald? Sorry we got duped by China, but trade is still good? Sorry its the CEO's fault for caring about short term goals?
I mean is it even ethical to continue with China? Buy Huawei after they stole all their tech from Cisco (or whatever example you want to bring here)?
I think the goal, beyond fair intra-US distribution, must be to force China to play fair. Market access, both import and export, must be tit-for-tat. IP theft and license infringement must be handled in the same way. This would give China a legitimate way to act in the same way if an US company acts out. If that occurs, we may have a mutually beneficial equilibrium.
Currently, it is not. And it is also not stable. The more wealth, production and IP shifts - or seems to shift - from US to China based on seemingly unfair advantages, the closer we are to war.
The only thing Google isn't allowed to sell in China is access to uncensored information. Their advertising business is alive and well (albeit censored), as this article about them disallowing VPN ads in China demonstrates: https://www.zdnet.com/article/google-bans-vpn-ads-in-china/