Is the kidnapping of Meng Wanzhou (from Huawei) a turning point?

Is the kidnapping of Meng Wanzhou, a senior executive of Huawei, a turning point?

Let us leave aside the cowardly Canadians bending to the capricious will of a declining United States, or the increasingly ineffective sanctions that the USA slaps on all and sundry, and consider what I have elsewhere called China’s dialectical leap into the future.

Huawei’s technological breakthroughs are only one – albeit important – aspect of a much larger process. Having been the first to test successfully a 5G communication, Huawei has developed a whole process that enables it to roll out a complete network in countries keen to get hold of it. 5G will make wifi and national broadband networks obsolete. How has it been able to achieve this, along with superior technology all the way from smart phones to undersea cables? Of its 180,000 employees, more than half are involved in research and development. Has it done so through ‘intellectual property theft‘? Not at all, but through the active incentives of a communist party in China that knows such developments take place only with significant government support.

Yet, Huwaei is only one example of a whole range of technological breakthroughs that have been happening in China over the last few years. I will not go into the full range of these here, but will focus on wider social and political questions. This is because the dialectical leap is taking place not merely on a technological level.

Socially, the symbiosis – as many are now recognising – between traditional China culture and Marxism means that Chinese culture today means Marxist Chinese culture. The old Confucian four-character saying, ‘all under heaven is as common [tianxia wei gong]’ has been appropriated and reinterpreted in light of communism’s focus on the ‘common’. This has massive implications at all levels, from the share economy through a Chinese Marxist approach to human rights (in which economic wellbeing is the basic right) to core socialist values.

Politically, all of this is taking place precisely under the strong leadership of Xi Jinping. Call it what you will, but the reality is that a good dose of communist authoritarianism is precisely what China has needed in the last six years. The result: on average, 90 percent of people in China are confident of the direction in which the country is headed, and 84 percent of people at all levels have trust in the government and public institutions (as the Ipsos and Edelman poll agregates indicate). This entails confidence to innovate and take risks, with quite stunning results.

Back to the kidnapping of Meng Wanzhou: this is an extraordinarily clumsy move that will backfire in so many ways. Only time will tell, but this may well be the moment when countries like the United States, the UK, Canada, Australia and New Zealand (a small gaggle that once upon a time called the shots) really do begin to fall behind in a very noticeable way. By contrast, those keen to engage with and make use of Chinese breakthroughs may well begin to leap ahead as well. The candidates are many indeed, from Russia through Africa and Central Asia to Latin America. Now that would be a different world.

 

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2018: The Year Apple Products Became Obsolete

Is 2018 the year that the global symbol of U.S. technological innovation became obsolete? Or is it the year when we began to realise a reality that has actually been the case for a while?

Not so long ago, it was a given that Apple products would be manufactured in China, but that the crucial value-adding would take place in the United States’ infamous Silicon Valley. In this way, companies like Apple could maintain a stranglehold on the global supply chain. No matter that it was often Chinese whizz-kids who were actually in Silicon Valley, finding new ways to keep Apple in front and ensuring the final value-adding.

In 2018 a few small but significant shifts took place. Let put this in terms of personal experience. A couple of years ago and against my better instincts, I had accepted a Macbook Air from an employer. I eventually became used to the machine, even with its counter-intuitive and closed structures. It had a good battery and good modem inside and it seemed to work passably well for the first year or so. But it was always a frustrating piece of equipment. After a year or so, its basic clunkiness became more apparent. Despite all the vaunted hype by Apple enthusiasts, I found it no better than other machines I had used earlier.

In late 2017 I was fed up. In Beijing I bought a new Xiami laptop, which had recently been launched. At all levels, it is simple a superior piece of equipment. Xiaomi’s aim is to produce the best possible product at a reasonable price. This one was about half the cost of a Macbook Air. What had happened? I thought. Is this an anomaly? No, the value-adding had all taken place in China.

I could repeat these observations concerning the Xiaomi phones, but perhaps Huawei is a better example. In 2018 Huawei produced the world’s best smart phone, with integrated AI (artificial intelligence) and a ‘killer’ camera developed by Leica. Its global market share surged past Apple, and is now just behind Samsung. In a couple of years, it will become the world’s top-selling smartphone.

Is this a sudden development? Not at all, for the enmeshed socialist market economy of China has been in this path for a number of years. Technological breakthroughs – from high-speed trains, through bridge construction to smart phones and quantum communication – have been actively fostered. For example, for some years now more new patents are registered from Zhongguancun (near where I live in Beijing) than from Silicon Valley. While the former has been attracting more and more global talent, the latter has seen a brain drain.

In this light, the crude efforts – by one or two countries such as the United States and Australia – to suggest that Huawei, for example, is a ‘security risk’ should be seen for what they are: desperate rear-guard actions to try and restore the fortunes of companies like Apple.

The catch is that people know the technology is now increasingly obsolete and yet one is supposed to pay a premium price for such technology.

As someone from India – where Chinese high-tech products are in very high demand – put it: I am sick of the United Stated forcing obsolete technology on the rest of the world at gunpoint.