Xinhua News Agency: US sanctions will only stimulate innovation of Chinese companies, and may also lose the Chinese market

The Xinhua News Agency commented that the US sanctions will only stimulate the innovation capabilities of Chinese companies. There have been growing reports that China’s leading tech companies have been dramatically increasing their investments in developing semiconductors. The U.S. government has been tightening technology restrictions on China over the past few months, despite widespread concerns that such a move could disrupt global supply chains.

Xinhua News Agency: US sanctions will only stimulate innovation of Chinese companies, and may also lose the Chinese market

A file photo taken on January 28, 2020 shows the speed of a Huawei 5G phone test at the Huawei 5G Innovation and Experience Center in London, England. (Source: Xinhua News Agency) Although these sanctions may bring some difficulties to China’s high-tech development, they will also cost US high-tech companies a heavy price and risk losing the Chinese market, which has the potential to become The world’s largest market. On June 30, the U.S. Federal Communications Commission designated Huawei and ZTE, two of China’s leading telecommunications companies, as national security threats, and barred rural operators from purchasing equipment and services from them with government funds. On May 15, the U.S. Department of Commerce (DOC) amended the so-called “direct product rule” to restrict sales to Huawei and its affiliates of any product that uses even a handful of U.S.-origin technologies. A year ago, the DOC put Huawei on an entity blacklist, requiring U.S. companies to obtain government approval before selling to the company. Now, the U.S. has gone even further by imposing visa restrictions on Chinese students and visiting scholars, and has instituted stricter investigations of Chinese-American scientists working in high-tech fields.

Xinhua News Agency: US sanctions will only stimulate innovation of Chinese companies, and may also lose the Chinese market

Graduate students from China attend the Columbia University Commencement Ceremony held in New York, USA on May 22, 2019. (Source: Xinhua News Agency) The United States has also urged and even threatened other countries to stop cooperation with Huawei on 5G, in an attempt to establish a global blockade to stifle the global leader in 5G technology and hinder China’s high-tech development. In doing so, the U.S. side often invokes “national security threats” from Chinese products, which is unfounded and biased, as there has never been credible evidence to support such claims. Instead, in many cases, the United States uses its technological superiority to spy on the world, including the leaders of its allies. U.S. technological restrictions target any foreign company that challenges U.S. technological superiority, and their tactics may be profoundly unethical when necessary. French conglomerate Alstom was a victim in 2013, when the company was charged with bribery and heavily fined by the U.S. Department of Justice and forced to restructure, with the most significant part of its business acquired by a U.S. company , in preparation to challenge America’s leadership in the same business sector. There is no doubt that U.S. technological restrictions will seriously affect the normal operations of Huawei and other Chinese companies and disrupt global supply chains. Sudden supply bans would also cost U.S. high-tech companies hugely. It should be noted that no business in the supply chain is exempt from restrictions, including US companies. A recent Boston Consulting Group report found that if the U.S. banned semiconductor exports to China altogether, U.S. semiconductor companies would lose 18 percent of global share and 37 percent of revenue within three to five years. Even if the U.S. only maintains the restrictions already in effect, U.S. companies could lose 8 percent of global share and 16 percent of revenue, the report said.

Huawei’s rotating CEO Xu Zhijun introduces the achievements of 5G technology during a launch ceremony of the world’s leading Internet technology achievements in Wuzhen, east China’s Zhejiang province, December 3, 2017. (Source: Xinhua News Agency) The DOC’s recent ban on Huawei has been widely questioned by U.S. industry groups, warning that the ban will severely damage the U.S. chip manufacturing industry. Media reports quoted international trade lawyer Doug Jacobson as saying the move “will have a much greater negative impact on U.S. companies than on Huawei, which will develop its own supply chain. ,” and will eventually find an alternative. . China firmly opposes the irrational repression of Chinese companies by the United States and is trying to find solutions in the spirit of international cooperation and distribution. Andrew Polk, an economist at consultancy Trivium, believes that adding Huawei to the entity list “will accelerate the rise of technology in China”. Quartz quoted Polk in 2019 after the U.S. blacklisted Huawei: “This will ultimately prove the moment we are lit under fire in China. It’s not going to kill Huawei. Rather, it’s going to be the opposite.” It should be noted , U.S. sanctions will only stimulate the innovation capabilities of Chinese companies. There have been growing reports that China’s leading tech companies have been dramatically increasing their investments in developing semiconductors. With a population of 1.4 billion and rapidly growing consumption power, China has a huge market for almost every industry (especially the high-tech industry). In the long run, U.S. opposition to China could lose the Chinese market.

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