Strangling the Panda
Homer, Homer, you are not a bad man. But I couldn’t find a better picture to tell a story. Sorry to use this one…
Readers would certainly see the point I am going to make: The panda is now being strangled by Uncle Sam without mercy.
Uncle Sam was not a bad man previously, but he has reincarnated himself into a cold-blooded reptile. Unless the panda promises to be subjugated – economically maybe half of his, i.e., roughly 1/10th in per capita terms, happy to be a cheap and low-end source of goods, and militarily self-amputated to be a Third World country- Uncle Sam is not going to let loosen his grip!
Can the panda survive?
The West is cheering and betting that it will succumb, for Uncle Sam is simply too formidable at the moment.
* * * * *
But it is tantamount to cutting your own nose to spite
your face…
The Communist Party of China has just held his 20th national congress. And a week or two before this event, the US has just announced the most sweeping ban on the access of chip-making technology by China. No matter where you operate, as long as your ware is using a fair fraction of US’s technology, you cannot sell it to China. All in the name of US’s national security. Period.
But is this totally fatal to China?
I am no ICT expert. But I am happy to wager that Sleepy
Joe and his class of a classic case of cutting off own nose to spite own face,
or the Chinese fondness in saying “destroying enemy’s 800 at the expense of
your own 1000” in reverse. China is the market. By denying China
of the technology, you are just destroying your own market, the cost of which
will be billions and billions of dollars to the US economy, not only to China
and the rest of the world.
Only China has the critical mass to innovate applications to mass-market things to the world. Otherwise, whatever you invent, the only thing you can count on is a small niche demand. The last ten years saw the realization of this basic knowledge in the most phenomenal manner. Huawei’s phone became the undisputed world champion virtually overnight, followed by its 5G roll-out, until the US began to blockade the company. Now BYD’s electric vehicle is already generating huge interest in many parts of the world – with little fanfare and promotion.
Yes, many “Made in China” products are still lacking in quality, but Chinese producers have also begun to go upmarket. Huawei and BYD are leading the way; no one in the world can label them as low-quality producers.
In the 1990s, I was invited to be a non-executive and non-remunerated director of the Malaysian arm of one of a large Chinese SOE that was making power plants. Unfortunately, the IPP (independent power producer) that they were working on in Malaysia could not take off in the wake of the region’s crippling financial crisis at that time. I quit soon after. Some years later, I learned that the huge power plant that they had built in Java had to be mothballed because it did not seem to be able to work well. I was just reminiscing with Rocky Wong, my good friend, and among other things, we spoke about this power plant. Rocky is an expert in power plants; he has helped to roll out several IPPs (independent power plant producers) in Malaysia. He said there was nothing wrong with the technology or the equipment supplied and installed. He said the problem boiled down to the inadequacy of their manual’s instruction. Too much un-English English! Or in this case, un-Indonesian Indonesian! This also reminds me of the first couple of commuter trains delivered to Malayan Railway. The fault is said to be with the control and instrumentation. Basically an instruction issue, I suppose?
I was observing a podcast out of mainland China. The narrator was lamenting about the state of the agricultural machine manufacturing industry in China. He pointed out that an Indian manufacturer has successfully made China to eat dust in this industry. The company is Mumbai-based Mahindra which makes and supplies excellent farming machinery all over the world. Such machines are not really high-tech. Why can’t China master it? Answer: Too many manufacturers and all too anxious to introduce their wares. As a result, parts tend to be problematic. While Chinese farmers are usually handy enough to make-shift fix them, can you expect African farmers to do the same? No wonder, the latter tend to shy away from these machines. China knows the problem. Yet, bad manufacturers still proliferate.
Back to America’s strangulation of the chips’ availability and some of the advanced chip-making technology to China.
I remember being invited by the Institute of Higher Education Malaysia to be a panel to discuss the impact of the 4th Industrial Revolution on Education in 2018. Being a novice, I obviously had to do some research to prepare for the day. I was awed by so many new things: big data, block chain, etc. I was totally amazed by the possibilities that could be brough about with the advent of 5G. Indeed, the world is at the threshold to go into the 4th Industrial Revolution. Alas, with his effort to hold back China, Biden has put a brake to all that. There was a huge absence of innovative breakthroughs for the past two years. How sad!
Without allowing China to help create the “multiplication” effect in technology roll-out (which can only be made possible with more and more advanced chip[1]), and with Europe paralyzed by the war in Ukraine, the march towards into the 4th Industrial Revolution can only be tentative… until China overcomes the chip-making supply chain on its own steam.
And Xi Jinping in his address to the 20th National Congress of CPC on 16 October has made it abundantly clear that he is intending to do just that.
[1] I
read that China is already quite self-sufficient in 14nm and bigger chips, which
can more than satisfy even its present military and space science’s needs. It
has also successfully made some 7nm versions. But these chips are not enough,
if it strives to go into more advanced stuff.
[2] Taiwan-born
Jen-Hsun "Jensen" Huang (Chinese: 黃仁勳 Huáng Rénxūn; born
February 17, 1963) is co-founder and current president and CEO of Nvidia Corporation.
Also
Taiwan-born, Lisa Su (born 7 November 1969) is the president, chief
executive officer and chair of Advanced Micro Devices (AMD).
Tan Hock
Eng (陳福陽; Chén Fúyáng; Pe̍h-ōe-jī: Tân
Hok-iâng; born 1951/1952 in Penang) is the CEO of Broadcom Inc.
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