The Politics of China's Tech

Decoupling Goes Both Ways  

  Britain and France  have announced plans to phase out and ban contracting with Huawei. Italy and Germany are considering doing the same, although Angela Merkel's past reluctance to speak out against Chinese human rights violations and Germany's desire for closer economic ties to Beijing suggests that it's less likely that the regional leader will follow suite with its neighbors. And if they do it may be reluctantly so. Ties between the U.S. and Europe seem to keep hitting new lows. Although Huawei seems to have lost the battle for now, Chinese influence will try to fill the void that the U.S. has left. The Trump administration plans to withdraw 12,000 troops from Germany and Trump called Berlin "delinquent", for it's supposed lack of contribution to NATO's defense. Business Insider reported that Boris Johnson's government is privately desperate for Trump to lose the election. One cause of strain are the U.S. sanctions levied against Huawei which ultimately caused Britain's deal with Huawei to develop the U.K.'s 5G network, to get scrapped; billions of dollars of potential investment down the drain. A British government body had been studying 5G for years and it determined that the technology posed no threat to the privacy of British citizens, although the expansion of Huawei in general does give the Chinese Communist Party more power to perform espionage on its citizens and others. One could argue that the U.S. Patriot Act also simply uses privately owned technology companies to spy on its citizens in the same way that Huawei does, although for now, the onus is on China rather than the U.S., to reform its behavior in cyberspace. On July 31, the EU laid out sanctions against Russian, Chinese and North Korean hackers. Two Chinese individuals and a Chinese company were sanctioned for their involvement in an elaborate hacking campaign known as "Operation Cloudhopper", which broke into the networks of at least 8 major computer service providers and dozens of their customers in a bid to steal intellectual property. Practices such as this are receiving more media attention than they have before in recent years. China's suppression of early information related to the pandemic and its subsequent power grabs have caused it's global reputation to tank and many nations are beginning policies to decouple their economy from the Asian giant. Japan for example, has began to offer subsidies to it's car companies to move their manufacturing out of China and back into the home country. The challenge of decoupling is double-pronged however. With so much of the world's manufacturing based in China, it is likely that even if a product itself is not assembled in China some of its parts will have been made there. As well as being a global seller, China is also a huge purchaser on the global market. Many countries' economies such as those of Brazil, Argentina, and Australia depend heavily on selling raw materials and crops to China. Australia in particular has grown its wealth by selling raw earth metals used for producing technology to China. As the diplomatic ties between the two countries deteriorate, Chinese media has even indicated a desire to decouple from Australia in terms of China's purchasing of Australian metals. On Monday August 10, China's Global Times published an opinion piece saying the following. 

“On the one hand, China needs to reduce its relatively high reliance on Australia in areas such as iron ore imports; while on the other, we need to be prepared for the reality that our relations with Canberra will probably be on a long-term bumpy trajectory,”

Despite the global backlash, Chinese influence is still on the rise in certain locations. A report from World Politics Review highlights how Russia and China have been consolidating their influence in Central Asia, a region home to many rare earth minerals that could continue to fuel China's technology industries as ties with its traditional suppliers deteriorate. 

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