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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

Mobile Networks Suspending Orders for Huawei Smartphones: Report

The US export ban has forced Google to cut Huawei’s new devices off from its Android ecosystem

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Logo of Huawei is seen on the advert in front of the local offices of Huawei in Warsaw, Poland, Jan. 11, 2019. VOA

Mobile networks in Asia and Europe have issued suspending orders for Huawei smartphones following the US decision last week to restrict the company’s access to American technology, the media reported.

The inclusion of Huawei on an export blacklist means the Chinese company can no longer source software or components from US suppliers without a license. Existing devices are unaffected but the restrictions threaten future Huawei products and its leading position in building super-fast next generation 5G networks, CNN reported.

Vodafone, the world’s second largest mobile operator, said on Wednesday that it had paused pre-orders in the UK for the Huawei Mate 20X (5G) smartphone.

“This is a temporary measure while uncertainty exists regarding new Huawei 5G devices,” a company spokesperson told CNN Business.

The UK’s biggest carrier, EE, is also delaying the introduction of Huawei’s new smartphones. The company had touted the Mate 20X in a preview of its 5G network last week.

Japan’s top mobile operators took similar steps against another device, the Huawei P30 Lite, earlier on Wednesday. The phone was scheduled to launch in the country later this month.

5G
A woman stands at a Huawei booth featuring 5G technology at the PT Expo in Beijing, China, Sept. 28, 2018. VOA

Leading Japanese telecoms firm NTT Docomo announced that it has stopped taking reservations for the phone, and is “looking into the impact of the US restrictions”, Docomo spokesperson Yoshikumi Kuroda said.

Rival carriers KDDI and SoftBank Corp. said they will delay the release of the new Huawei phone.

The suspension of orders is the first tangible evidence that US President Donald Trump’s administration’s latest escalation of its campaign against Huawei on grounds of national security is hurting the company’s business, CNN reported.

Also Read- Britain’s First 5G Service to be Launched in May

Huawei overtook Apple last year to become the world’s No. 2 smartphone brand behind Samsung, and it relies on markets outside of China for half of its sales.

The US export ban has forced Google to cut Huawei’s new devices off from its Android ecosystem.

A temporary reprieve by the US Commerce Department allows Google to service existing Huawei devices for the next 90 days. (IANS)