Need To Know: May 20
Has Trump Killed Huawei?
Chinese tech giant Huawei says its survival is at stake following the Trump administration’s decision to cut the company off from international semiconductor supplies.
The U.S. government moved forward with a long-awaited measure requiring even non-U.S. chip manufacturers using U.S. chipmaking equipment, intellectual property or design software to apply for a license before shipping microchips to Chinese firms like Huawei.
This effectively forces Taiwan Semiconductor Manufacturing – the world’s dominant chipmaker – to choose between the U.S. and Chinese tech sectors. For now, at least, it’s choosing the U.S.
The firm, which produces some 90 percent of the world’s most advanced microchips and which last week announced early stage plans to build a factory in the U.S. – has reportedly halted new orders from Huawei.
The U.S. government believes Huawei helps the Chinese government conduct cyber-espionage and technology theft. Huawei’s “Safe City” products have also fueled concerns that China is exporting authoritarianism.
Huawei has installed its surveillance equipment in more than 160 cities in 50 countries with troubling rights records. Huawei floods designated areas with closed circuit TV cameras, and can connect the cameras to the cell phones of people in the area, giving a real time movement tracker.
The company acknowledged the impact to Safe Cities.
“This new rule will impact the expansion, maintenance and continuous operations of networks worth hundreds of billions of dollars that we have rolled out,” it said in a statement.
The U.S.- China break-up gets rockier by the day.
China Retaliates Against Australia
China has retaliated against Australia calling for an independent investigation into the origins of Covid-19 by slapping an 80 percent tariff on Australian barley.
Barley is one of the Australia’s top three annual agriculture exports, about half of which typically goes to China.
This follows Chinese suspensions of imports of beef from four Australian slaughterhouses, or some 35 percent of Australian exports of the commodity to China. And Beijing may not be done.
Chinese officials reportedly have measures targeting Australian seafood, oatmeal, fruit, wine and cheese locked and loaded. Chinese state media in recent weeks has also warned of consumer boycotts.
China is Australia’s most important trading partner, with agricultural shipments alone totaling about A$16 billion ($10 billion) in 2018-19. While the big ticket items of iron ore, coal and natural gas that China needs to build and fuel its economy so far haven’t been mentioned, education and tourism could also be vulnerable to reprisals. Beijing’s ambassador to Australia last month suggested Chinese tourists and students may decide to boycott the nation.
Countries like Canada, Australia and New Zealand (and South Korea, Japan and Taiwan) need to come together to target China collectively. But the chance to make money while someone else is in the line of fire means they likely won’t.
China and India Border Clashes
China and India are sparring again in the Himalayas over a long stretch of disputed border.
India bolstered its military presence in the Galwan Valley region on Monday in response to a growing Chinese People’s Liberation Army (PLA) buildup. Chinese forces have set up more than 80 tents, established temporary defensive positions, and positioned reinforcements nearby to respond quickly if an incident should occur.
The latest spat began when India started road construction near an area claimed by both sides.
Earlier this month in two separate incidents, Indian and Chinese troops were engaged in fist fights and stone pelting in Sikkim and Ladakh resulting in injuries among soldiers on both sides.
As we’ve pointed out, altitude and supply chain logistics make the Himalayas are a near impossible place to wage ongoing war.
But the ongoing clashes deepen distrust and affect Chinese and Indian relations in other areas.