China: ‘Rough Disruption To Market’ Is How We See Huawei Ban
Since past few days, nearly every media outlet has given substantial coverage to US’s major strike in the ongoing US-China trade war that came in the form of nearly 30 US firms closing business ties with China’s tech-giant Huawei. While Huawei seemed to have some backup plans in its pocket, some analysts termed this ban as ‘instant kill switch’ for Huawei.
Wang Zhijun is Vice Minister of Industry and Information Technology in China and he is among few high-ranked Chinese officials who publicly spoke about this development. He termed the American government’s accusations as ‘groundless’ and its action as ‘rough interference’ in the global integrated circuit market.
Mr. Zhijun, while interviewing for a state broadcaster television, hit back on America for claiming to be an open market and yet making such moves. He vows to further open Chinese markets for foreign investments. The Chinese official has also urged the United States to stop the policy of ‘unreasonable suppression’ of Chinese tech companies and revert back to a fair environment where Chinese companies could compete on fair terms, both in global and American markets.
Traditionally, China has been a closed economy. However, the Chinese government took revolutionary economic steps during the last few decades as it went on to open various sectors of its economy for foreign investment. The Chinese government is further looking to narrow the number of sectors that remain closed for foreign investment. China is specifically looking to further open its shipping, airlines, telecom and automobile sectors in order to encourage foreign investments, told Mr. Zhijun.
Huawei currently ships 51% of its mobile devices in international markets and the ‘Huawei ban’ is likely to sabotage the company’s ambition of becoming the biggest smartphone manufacturer in the world. One way for China to respond to this suppression could be to ban the import of American products, such as iPhone and food products. However, if China chooses to respond precisely as Chinese vice minister for Industry and IT mentioned i.e. continuing opening the Chinese economy; it will surely result in a far more interesting economic battle between the two economic giants.
From 5G technology to data security and economic implications to making a political statement, the ongoing war has various dimensions. The American president seems to be willing to go full offensive, while the Chinese response has been calmer so far. However, it may be too early to draw conclusions as only time will tell how both parties respond to developments and what future implications these decisions might have to offer.