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Silicon Valley Unsure of Washington’s China Concerns

The stakes make it hard to predict how the U.S. and China will come to an understanding. In the meantime, Silicon Valley investors and entrepreneurs have accepted for now a cooling-off period for cross-border investment.

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Attendees pass by a Huawei booth during the 2019 CES in Las Vegas, Nevada, Jan. 9, 2019. VOA

They call it the Trump effect.

Increased government scrutiny of Chinese investments in Silicon Valley has meant some deals are not getting done. Some aren’t even considered.

Usually eager for money and tantalized by the prospect of the Chinese market, startups are even declining Chinese investment.

After years of growing ties between China and Silicon Valley, the U.S. tech capital sees itself caught between Beijing and Washington over which country will win the competition to create the next generation of communication technologies.

“China’s innovation efforts are broad and deep,” said Michael Wessel, commissioner of the U.S.-China Economic and Security Review Commission, at a recent congressional hearing. “China wants to be a global innovation leader and is doing all that it can legally and illegally to achieve its goals.”

A man checks his phone next to an advertisement of a new Huawei Mate X device at the Mobile World Congress in Barcelona, Spain, Feb. 26, 2019.
A man checks his phone next to an advertisement of a new Huawei Mate X device at the Mobile World Congress in Barcelona, Spain, Feb. 26, 2019. VOA

Flashpoint Huawei

Huawei, the Chinese telecommunications company that is building a 5G network in countries around the world, remains a flashpoint. Its chief financial officer faces extradition to the United States from Canada on fraud charges.

At the Mobile World Congress in Barcelona last week, U.S. and Huawei officials lobbied world leaders on whether Huawei should be trusted.

U.S. concerns about China and technology extend to the nation’s methods to achieve technology dominance, as outlined in Beijing’s Made in China 2025 plan.

In addition to subsidies for industry, and research and development, the U.S. says those methods include massive cyberhacking campaigns to steal corporate secrets, forced technology transfers to Chinese partners, and government policies that reward intellectual property theft.

Increased scrutiny of Chinese investors

The U.S. government wants new barriers up because it believes some technologies, such as artificial intelligence and robotics, are important to national security. But many in the tech industry see risks in new restrictions.

“By not working with China, not only do we have less access to information to what they are doing,” said Parag Khanna, author of “The Future Is Asian.” They will substitute us for more reliable partners and we will be cut out of the entire market.”

The race to build 5G

Chinese companies are racing to build 5G wireless communication networks around the world, which Washington says risks giving Beijing enormous opportunities for electronic surveillance.

The stakes make it hard to predict how the U.S. and China will come to an understanding. In the meantime, Silicon Valley investors and entrepreneurs have accepted for now a cooling-off period for cross-border investment.

The disconnect between Silicon Valley and Washington is hard to bridge, said Christian Brose, head of strategy at Anduril Industries, a Southern California tech company that works with the U.S. government.

Also Read: U.S. And China Close To Reaching Long Awaited Trade Deal

“When you have a conversation where one party sees China as an emerging national security challenge, and the other sees it as an emerging business opportunity, that’s just a fundamental clash of cultures and expectations that is difficult to reconcile, but I also think it’s not impossible,” he added.

While the two countries negotiate, Silicon Valley, caught in the middle, waits. (VOA)

Next Story

Vice President Mike Pence Claims, United States “Will Not Tolerate” Detention of Roberto Marrero of Venezuela

A collapse in world energy prices, corruption and failed socialist policies have destroyed oil-rich Venezuela's economy.

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U.S. Vice President Mike Pence speaks to the media at the White House in Washington, Jan. 9, 2019. VOA

U.S. Vice President Mike Pence has said the United States “will not tolerate” the continued detention of Roberto Marrero, chief of staff of Venezuela opposition leader Juan Guaido.

Marrero was arrested Thursday during a pre-dawn raid on his home. Venezuelan Interior Minister Nestor Reverol explained the arrest, saying a “large number of weapons” were found in Marrero’s house.

Pence made the statement in an op-ed piece for the Miami Herald Friday. He warned that the United States would not tolerate Marrero’s detention or intimidation of the Guaido government, which the U.S. recognizes as the legitimate government of Venezuela.

Personal belongings are seen on the floor at the residence of Roberto Marrero, chief of staff to opposition leader Juan Guaido, after he was detained by Venezuelan intelligence agents, according to legislators, in Caracas, Venezuela, March 21, 2019.
Personal belongings are seen on the floor at the residence of Roberto Marrero, chief of staff to opposition leader Juan Guaido, after he was detained by Venezuelan intelligence agents, according to legislators, in Caracas, Venezuela, March 21, 2019. VOA

​Pence also called out Cuba, Russia, and China for supporting the administration of embattled president Nicolas Maduro and profiting from it.

He said Cuba is allowing its military and intelligence services to train, support, and equip Venezuela’s secret police; Russia vetoed a resolution at the United Nations calling for unfettered aid to Venezuela; and China is refusing to grant a visa to economist Ricardo Hausmann to attend the Inter-American Development Bank’s annual meeting, which it is hosting.

Pence called Maduro a “corrupt dictator” and said those nations are holding Venezuela back in its “steady march towards freedom.”

“Nicolas Maduro must go,” he said.

Guaido, head of the National Assembly, has declared himself interim president after disputed elections. The United States and about 50 other countries have recognized him as Venezuela’s legitimate leader. But Maduro has vowed to remain, leaving the two men in a struggle for power.

U.S. citizens detained

Also Friday, the State Department issued a statement of concern for “all U.S. persons” detained in Venezuela. Prison officials reportedly are preventing lawyers and families of detained Americans from seeing or bringing food to the detainees.

Six U.S. citizens, executives of the oil company Citgo, have been in jail since November 2017 for alleged money laundering and embezzlement.

The two U.S. senators from Texas, home to five of the six detainees, say the six are being held in deteriorating conditions. The legislators also say Venezuelan authorities have denied the detainees a trial and contact with the State Department.

Citgo is a U.S.-based refinery and gasoline marketer primarily owned by Venezuela’s state-run oil company, PDVSA.

President Donald Trump has said all options are on the table for Venezuela, but he has not said under what circumstances he might consider using U.S. military force.

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A collapse in world energy prices, corruption and failed socialist policies have destroyed oil-rich Venezuela’s economy.

Food and medicine are scarce, and more than 3 million Venezuelans have fled the country. (VOA)