The Tech War Behind The Trade War

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Behind the news of the trade war between the US and China, there has been a longstanding race over global market share in the tech industry.

China has been making massive strides in communications technology while the trade war has hit tech companies on both sides of the Pacific.

The global tech industry is extremely interconnected. This fact has been clearly illustrated by the US-China trade war, sparking worries that the global tech supply chain will be put at risk. China relies on overseas imports for components of its computer chips. While the country relies on these imports in its tech industry, it has not hidden its mission of becoming self-sufficient technologically. The trade war with the US has pushed China to push forward with its plans even faster. China currently makes less than one fourth of the semiconductors used in its tech products. The country now plans to increase this figure to 70% by 2025.

US tech companies have been rattled by the trade war as well, but continue to carry on. While measures taken by the Trump administration have pushed at Chinese tech, most iPhones and a lot of other US tech products are produced in China. Going forward, as the trade war unwinds, Chinese suspicions over US trade policies will continue to drive it towards self-sufficiency. This will be seen especially strongly in the areas of 5G and artificial intelligence. Right now, the US has the advantage of Silicon Valley being very disconnected from the political powers in Washington DC, while also continuing to attract top talent from around the world. At the same time, China’s Huawei has continued to roll out 5G technology worldwide. Most recently, the Indian government allowed Huawei to participate in trials for 5G networks in the country.

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2 years ago
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