China, Huawei, U.S. discussed on Bloomberg Daybreak


I'm John Tucker in New York with your global look ahead at the top stories for investors in the coming week We've talked a lot about decoupling with the U.S. and China both looking at trying to decrease dependence on the other Now those were China may be taking it to a whole new level and for more we go to Bloomberg daybreak Asia hosts Brian Curtis and dun Chris John China set up a secretive committee 5 years ago to find local companies that could replace American and foreign technology Sources say these companies would vet and approve suppliers at home from cloud to semiconductors Now the committee has already grown to 1800 firms and the reason for this aggressive push well it's the U.S. blacklisting of certain large Chinese tech companies Well for more on how this is unfolding Doug and I reached out to Peter L strum Bloomberg's executive editor for Asia technology Peter let's go back to the beginning 2016 What was the motivation to exclude U.S. and western suppliers Well China has had a desire for a long time to be able to move away from the foreign technology that it's companies use that its government organizations use and rely instead on their own domestic technology So this has been a long-standing goal of the Communist Party and the government in China but they have struggled to accomplish this for a number of reasons They lag behind in several key cutting edge areas of technology particularly semiconductors some networking and software especially the kind of software that can run a large corporate systems and government organizations So they've been pushing for a while but they have not been very successful Now with the clash particularly between the Trump administration and Xi Jinping in China the tensions have risen to the point where China is more determined than ever to replace foreign technology with its own One of the flash points is you alluded to earlier was the blacklisting of Huawei the big telecom equipment giant that the U.S. cut off from American components a few years ago that really hurt the smartphone business of Huawei in particular and that kind of little fire under the Chinese government to try to move more quickly in replacing these foreign technologies Yeah the Huawei story is very much about 5G we get that And the technology that would be used for mobile telecom for consumers also for the backbone of autonomous vehicles But I think that 5G is critical because it becomes the basis for industry four right The so called dark factory no humans only robots is China at the same time making an aggressive push into using more automation for manufacturing Well certainly one of the tensions in China right now is how to keep the economy on track amid COVID troubles the trade war with the U.S. multiple other challenges that they've got And also a very serious demographic shift where they're looking at a shrinking of the workforce in the future and they need to figure out how they're going to be able to replace some of those workers positions with more automation So that's certainly one of the subtext here Part of this is also security They don't want to have their banking systems or the government organizations run on say and IBM mainframe or some of the old technologies that they've got They don't want to have their technology champions like a Huawei vulnerable to the United States deciding that they're not going to let a company like Huawei buy chips from Qualcomm or Nvidia for that matter So there's a long-term security goal that kind of goes along with the effort to improve automation and replace some of these jobs with technology So Peter could we say that this blacklisting of Chinese companies originally by the U.S. has actually helped China stimulate its own homegrown technology sector particularly in some of these areas like we've talked about semiconductors cloud AI Well the success of these programs is really yet to be seen Again China has been trying for years to build its own technologies and some of these curious like semiconductors largely without success They have not been able to catch up to the leading edge companies in the world which includes Taiwan Semiconductor Intel Samsung for example I would say that more likely the blacklisting by the U.S. increased the determination of China to get on track with building some of these pillar technologies that they need to be able to build a solid foundation for their economy for their companies and for the government organizations Peter thanks so much for joining us Really interesting Peter elston there Bloomberg's executive editor for Asia technology I Brian Curtis along with Doug Kristen You can catch us every weekday for Bloomberg daybreak Asia beginning at 7 a.m. in Hong Kong at 6 p.m. on Wall Street John Ryan and Doug thanks a lot Just a hit on Bloomberg daybreak weekend We'll go to Washington hand take a look at the U.S..

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