America and its allies are crafting rules to try to prevent it
DURING DONALD TRUMP’S presidency many people looked afresh at China’s technological prowess. Some concluded that it posed a threat to Western economies, and perhaps even to global security. In news headlines Huawei, a brilliantly successful manufacturer of telecoms equipment, became the face of that threat. America accused the firm of acting as a conduit for Chinese government surveillance and control. In 2018 America clobbered Huawei. It banned the export to the Chinese firm of American microchips essential for its products. This seems to have had the desired effect. Last year Huawei’s revenues shrank for the first time in a decade, by almost a third.
It was unprecedented for a state to stymie so huge a tech company. Huawei’s revenues were about as big as Microsoft’s. But the feat was not without costs. Because the Trump administration acted without co-operating closely with America’s friends, it prompted investors from far and wide to add missing links to parts of the semiconductor supply chain that are beyond the reach of American law.
This article appeared in the International section of the print edition under the headline “Game of chiplomacy”
From the January 29th 2022 edition
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