Written by: Anil Banjade - 21103, Grade XII
Posted on: 15 December, 2020
China entered the US market after the approval of the trade agreement by Bill Clinton in 2000. China didn’t stop in the USA but gradually, they started to cover the European market. Since then, the Chinese economy has never looked back. The Chinese economy is the world's fastest-growing economy and its GDP doubles in 8 years. In 2015, China gave the slogan “Made In China 2025”. Their main goal was to become the superpower by 2025. They asked the companies to work as per the principle of the Chinese government. That’s when the USA realized, they might be thrown away from their No. 1 position and then the USA started to put pressure on the Chinese government by banning different tech companies.
Huawei was the first company who was caught between these two superpowers. Huawei's annual revenue in the year 2018 was 120B USD. They became the number one telecommunication manufacturer in the year 2012 beating Ericsson. They became the highest mobile seller beating Samsung in 2019. The US government banned Huawei saying they have been working for the Chinese government. They claimed Huawei has been creating backdoors to keep the track of the people's information. Huawei has clearly said that it’s not fair with them and they have asked for the proofs but the US government has not been able to give the proofs to date. The US has also restricted Google, ARM from providing services to Huawei which was a big blow for them. Huawei has come up with the Harmony OS and they have said it is 60% faster than the android.
What does this mean to this world?
Huawei is one of the biggest companies in the world which manufactures almost all electronic devices including Smartphones, MODEM, USB, VR, and many more. The international market has seen a price hike after this ban. The price hike was expected because the manufacturing cost of the product in China is less in comparison to other countries because of cheap transportation, electricity, and availability of skilled manpower. That’s the reason 90% of Apple products are made in China. 5G is expected to be 10 times more expensive if the US-based company brings it to this world.
China or USA, Who wins?
Huawei has faced a fall in their revenue, but they have been working on Harmony OS and they are trying to survive in the international market by partnering with different organizations around the world. They are inviting people to work on their open-source projects. It’s not just Huawei. The companies like Apple, Facebook, Google earned 11 B USD in 2018 from Huawei. The US-based Chip Tech Group has decided to move to Switzerland and the CEO of RISC-V foundation says “If you clamp down on things too tightly this is going to happen. In a global supply chain, companies have choices, and the choice is to go abroad.” The investment in the USA has decreased and International companies have chosen to move to the international market. It’s upon both the government and the companies how they call for the investment. To date, none wins but the next five years will show who wins and becomes the World's biggest superpower.
References:
Keane Sean, Dec 8, 2020, CNET.com
Finley Klint, July 16, 2019, Wired.com
