US toughens sanctions on technology company that could scupper China’s 5G aspirations, days before banning investment in China-linked fund
ASIA TIMES
This was the week that the US began turning the screw on China.
No one could say they didn’t see it coming – President Donald Trump had long been rattling his sabre against technology giant Huawei Technologies and threatening to bar a key American pension fund from buying into Chinese-based investments. It also follows weeks of berating Beijing over the Covid-19 outbreak.
But when Trump confirmed both would face economic penalties, markets – and analysts – began to fear the worst.
The Commerce Department said at the end of last week that it would broaden its sanctions enforcement on Huawei to include semiconductor designs that are developed using US software and technology. That threatens sales of the Shenzhen-based telecoms firm’s sales of handsets, which use US-designed chips made my Taiwan Semiconductor Manufacturing (TSMC).
Huawei Technologies said the US risks opening a “pandora’s box”, along with Chinese retaliation if it chooses to go ahead with the additional restrictions, reports Dave Makichuk.
China’s largest tech firm warned that the latest US curbs will inflict a “terrible price” on the global technology industry, inflaming tensions between Washington and Beijing while harming American interests in the long run.
Having used the “nuclear option”, the US may have effectively halted China’s rollout of its much vaunted – but controversial – 5G high-speed networking infrastructure, writes David Goldman.
The plan could backfire, he adds. If China retaliates by shutting US tech companies out of the Chinese market, the outcome will be a collapse of trans-Pacific technology trade, aggravating what already is the worst economic downturn since the Second World War.
China emerge stronger after coronavirus, partly because of the successful containment of the Covid-19 pandemic and the early start to re-opening the economy that afforded it.
The other weapon discharged from Trump’s armory this week was an order that the Federal Retirement Thrift Investment Board drop its investment in an MSCI index that includes Chinese companies.
On the face of it, the move is of limited significance, writes Alan Wheatley. Potential flows of up to $6 billion into China could be affected. But the signalling effect of the ban is much greater.
If global capital markets are balkanised by the move, money will not be allocated as efficiently as it otherwise would be. Rather than scouring the world for the most remunerative opportunities, investors will increasingly turn inwards, focusing on either the US or the Chinese sphere of influence.
If Trump’s intention is to weaken China’s economy, he may be wasting his time. Ken Moak argues in an opinion piece headed “Why China might emerge stronger after Covid-19” that the pandemic could work to Beijing’s economic advantage.
Partly in light of the successful containment of the Covid-19 pandemic and the early start to re-opening the economy that afforded it, China might again become the world’s engine of economic growth, Moak writes.
Read the full stories in Asia Times
- Trump bets the farm on Huawei equipment ban
- Huawei draws line in the sand amid US-China tensions
- Huawei says ‘survival’ at stake after US chip rule
- Trump’s pension fund ban could split global markets
- US blocks Huawei global chip suppliers
- Why China might emerge stronger after Covid-19
- US, China could be sleepwalking into a new war
- Smoking may protect against Covid-19, study shows
- Intelligence agencies probe ‘hazardous event’ at Wuhan lab
Last item!
Did any of the games participants get tested for cv19?