The US-China Tech Cold War

The Trade War is not the only war ongoing between the United States and China. There is another war hidden behind the curtains – The US-China Tech Cold War.

How it began

China has spent nearly 25 years building a tech blanket over its empire. This blanket, referred comonly to as the Great Firewall of China, is a one-way blanket: it blocks external companies like Facebook, Google, Amazon while it allows its own home-grown companies to expand abroad. It built its own version of the global tech giants: Baidu for Google, Renren for Facebook, Alibaba for Amazon. US Companies, therefore, are losing out on 20% of the world’s internet traffic, and a lot of lost revenue.

The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies – Bloomberg

Source – Bloomberg

The Economist said, “Superpower relations have soured. America complains that China is cheating its way to the top by stealing technology, and that by muscling into the South China Sea and bullying democracies like Canada and Sweden it is becoming a threat to global peace. China is caught between the dream of regaining its rightful place in Asia and the fear that tired, jealous America will block its rise because it cannot accept its own decline.” Some of these cheating methods came to light in October 2018 and Bloomberg got us a big coverage on the issue. Amazon was profiling a company, called Elemental, it was about to accquire. In the audit, the testers found a tiny chip the size of a grain of sand on the motherboard, which was not part of the original design. Amazon reported this inconsistency to US authorities and this sent a shockwave throught the tech world. We can never know all the products in which these chips are present.

Source – Bloomberg

The Present

Just today, President Trump is sealing up the tech wall from the other side. Google announced that it would limit its services it provides to Huawei and other Chinese companies. Huawei depends on Google for it apps and operating system, and the discontinuance of these services would lead to big damage to a part of its bussiness. The move puts immese pressure on Huawei’s internation expansion.

If the US and China have finally begun their Tech Cold War, Huawei could be seen as its beginnings of a Tech Iron Curtain as report of US media. In this present and the future, China will continue blocking much of the world, and the US will contemplate on whether it would do the same thing in return.

It is still not clear whether the Trump administration’s move will truly isolate Huawei’s technologocal aspirations. The US has failed to pursuade other countries from blocking the sale of Huawei products. Huawei has already developed its own chips and other capabilities, and has said that it has stockpiled equipment for a day when it would lose access to American know-how and equipment.

But it is clear – the Tech Cold War has just begun.

Copyright © 2019 by Tech Decoder, Atharva Kale


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