I don’t understand this analysis. Surely it would be easier for the Americans to control and damage the Chinese economy if Xi Jinping and Chinese business leaders were typing out emails and memos on backdoored Microsoft software or iPhones. Forcing Huawei to develop their own tech via hostility means that the Chinese market is lost forever and now the American security apparatus has to deal with an opaque ecosystem they can’t backdoor.
I’ve heard people say that the October Hamas attacks on Israel were so surprising because they were planned entirely via Chinese tech and therefore was not picked up by Zionist elint. I don’t necessarily think that’s true or even the only reason, but it’s not an implausible example of how forcing China to make its own systems is a huge own goal.
All this hostility has just made China more and more self sufficient. I just don’t see how that gives the US more leverage than a China which is completely dependent on Western tech.
On the contrary, America cannot possibly compete with China on industrial and technological terms. Its best bet is to control China’s growth through global trade.
This is possible because China relies heavily on export revenues. We know this because China’s annual budget deficits have been kept below 3% for the past decade except for 2 years. This means that the vast majority of Chinese budget came from exports and credit, not fresh central bank money creation.
What this also means is that if you can block countries, say businesses from Southeast Asia or other parts of the world, from using native Chinese technology on the grounds that they are technically incompatible with Western made ones, and make it extremely costly for them to switch, then China’s exports will fall, and together with it investment in their own technology. Countries will literally have to choose between doing businesses with China at the expense of losing US and EU customers, which they have served for decades.
This is what “decoupling” means, and it is actively pursued by the US. As I said, this is the landlord strategy. Do you really think Microsoft came to prominence because it made the best products? No, it relied heavily on legal and financial means to bully their competitors out of the scene.
This is why China’s best bet is to become self-sufficient, and to do that it needs to stop being a net exporter country.
I don’t understand this analysis. Surely it would be easier for the Americans to control and damage the Chinese economy if Xi Jinping and Chinese business leaders were typing out emails and memos on backdoored Microsoft software or iPhones. Forcing Huawei to develop their own tech via hostility means that the Chinese market is lost forever and now the American security apparatus has to deal with an opaque ecosystem they can’t backdoor.
I’ve heard people say that the October Hamas attacks on Israel were so surprising because they were planned entirely via Chinese tech and therefore was not picked up by Zionist elint. I don’t necessarily think that’s true or even the only reason, but it’s not an implausible example of how forcing China to make its own systems is a huge own goal.
All this hostility has just made China more and more self sufficient. I just don’t see how that gives the US more leverage than a China which is completely dependent on Western tech.
On the contrary, America cannot possibly compete with China on industrial and technological terms. Its best bet is to control China’s growth through global trade.
This is possible because China relies heavily on export revenues. We know this because China’s annual budget deficits have been kept below 3% for the past decade except for 2 years. This means that the vast majority of Chinese budget came from exports and credit, not fresh central bank money creation.
What this also means is that if you can block countries, say businesses from Southeast Asia or other parts of the world, from using native Chinese technology on the grounds that they are technically incompatible with Western made ones, and make it extremely costly for them to switch, then China’s exports will fall, and together with it investment in their own technology. Countries will literally have to choose between doing businesses with China at the expense of losing US and EU customers, which they have served for decades.
This is what “decoupling” means, and it is actively pursued by the US. As I said, this is the landlord strategy. Do you really think Microsoft came to prominence because it made the best products? No, it relied heavily on legal and financial means to bully their competitors out of the scene.
This is why China’s best bet is to become self-sufficient, and to do that it needs to stop being a net exporter country.