The Truth behind the U.S./China Trade War

Technology in Focus

Is the China/America Trade War really about Trade or are the underpinning core issues Technology-driven? As technologies advance and the reliance on technologies deepen, it is inevitable that governments focus more on the controlling factors that encompass all aspects of tech. 

The fear for governments is that their economy may become too transparent and therefore open to outside interference, manipulation and influence. The American voting interference that resulted in Donald Trump becoming President of the most powerful country on earth is a clear case of external forces manipulating internal affairs. The continuum of such actions can cause havoc on economies influencing buying cycles, the movement of money, social economics, politics and even national security.

The Outward Battle

No country wants to lag behind in the technology war as technology translates to control and power. The stakes are high for the U.S. as they took the bull by the horns in an attempt to curb Chinas wayward actions with Intellectual property theft that supported their rapid economic growth. Recently Beijing sent out an internal mandate for all its government wings to wean off their reliance on American Technology within the next three years. The wean off American tech exercise from Beijing comes after the U.S. blacklisted Chinese tech giant Huawei in May this year. CNBC reported that 'China has traditionally been reliant on U.S. suppliers for key tech components such as chips and software, as well as modems and jet engines, but recent developments in the two countries' protracted trade war have strained those ties and affected businesses from both sides.' China has established a new state-backed semiconductor fund, with the intent of advancing its domestic semiconductor initiatives and reducing its reliance on U.S. technology. The fund currently sits at 204 billion yuan ($28.9 billion) and is the second of its kind, with the first state-led fund taken place in 2014. "Techspot" reported that China is the largest consumer of semiconductors in the world, and Bloomberg reports that China imports roughly $200B worth of American semiconductors annually.

It becomes even more apparent that technology is the primary focus of both countries and that Trade is the negotiation lever that is currently being used to bend wills while tariffs are the penalties for non-compliant behaviours. The current course for China is to stimulate its domestic market by nurturing it's in China-for-China strategy that focuses on its sizable local market to fend off its downward trajectory on declining growth brought on in part by the Trade War but also by its massive offshore expenditures relating to the One Belt One Road initiative.

It would, therefore, be inaccurate to say that the Trade War is about Trade. A more accurate explanation would be that the Trade War is a by-product of the Technology conflict between a rising global power and a declining global power. It's not just about Trade. It's about technology and the influence that technology has on the global stage.

The Inward Battle

Within the U.S. and Europe, there has been increasing discussions about decoupling large tech companies because they have power and control over aggregations of data sets that influence consumerism and politics. The management issues of all this data and the constant data breaches that "Big Tech" companies encounter is on the rise. The alluring propensity to hack into value-driven information is too lucrative an opportunity to miss. The secret service relishes an inside look at privileged information, and so do other governments and companies that can gain from the data obtained. A hackers mindset continually evaluates the risk versus reward equation. With such mega rewards on the horizon, the intensification of hacking activity has seen many an organisation having to own up to the breaches in their data security. The unfortunate state of affairs leaves the powerless consumers oblivious to psychological manipulation taking place from external forces who have gained access to their personal data. Identity theft is appalling, and yet the rise of this type of theft is gradually affecting economics. With inward-focused lenses, you can see how technology and the mismanagement of data and information can affect every level of government and economics. The real reasons behind the Trade Wars are now in the spotlight, and the wool should no longer cover the eyes of reality. 

Most people see economics as complicated and obscure. They fail to see the devil in detail and find it hard to grasp the relevance of how it impacts their daily lives. However, they are beginning to see how technology plays a role in economics and politics and are becoming more aware of its influence on their personal wealth and wellbeing. The realisation of how data is being exploited and the unknowing extents of who has access to their data and the ownership of that data. Is linked back to the technologies that harness it. 

For those businesses exploring the fringe benefits of technology and the meaning of economics within their sphere, Strategy Hubb has a way of making the seemingly complex uncomplicated. For business clarity and strategy on a domestic or International capacity, Strategy Hubb is the best place to start your journey of discovery. 

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