From Germany embracing Huawei’s 5G to Chinese economic prowess

While I have been researching Eastern European market socialism, with its breakthroughs and logjams, have not posted so much recently. But there are some interesting recent developments.

First, despite all the hype about Huawei in small corners of the world, business is booming with company sales improving more than 25 percent compared to last year. Its new phone, the Mate 30, simply challenges you to do without the nefarious dealings of Google. For some time now, I have not been using any of the Google items, so this is good news. Further, Germany has decided that Huawei poses no risks whatsover, and indeed that it helpfully prevents US spying, so the company that has most global patents in 5G will be integral to Germany’s development.

On a related note, despite all the uncertainties of the global situation and with a new wave of US-driven nationalistic protectionism, the Chinese economy is moving ahead solidly. Chinese experts have have been predicting a gradual slowing of growth for some time, as China makes a transition from high volume to high quality, and with a focus on ecological civilisation (shengtai wenming). Then again, 6 to 6.5 percent growth now in China is equivalent to 15 percent 10 years ago, and it is way above standard levels elsewhere.

 

The game is up: you cannot install and run 5G without Huawei

For some time now, Huawei has been quietly confident that no-one else has the ability to install and deploy 5G technologies without involving Huawei itself.

Now the new figures are out from the World Intellectual Property Organisation (WIPO). In 2018, Huawei’s had 5,405 PCT (Patent Cooperation Treaty) applications, which – as Francis Gurry, the director of WIPO observed – is “an all-time record by anyone.” By comparison, the runner-up was Mitsubishi, in Japan, with 2,812.

And the vast majority of Huawei’s patents relate to 5G, to which the company has been devoting world-leading investment in research and development, backed strongly by the Chinese government.

Let me add that Gurry also pointed out that “Asia is now the majority filer of international patent applications via WIPO, which is an important milestone for that economically dynamic region and underscores the historical geographical shift of innovative activity from West to East.” WIPO statistics showed that 50.5 percent of all Patent Cooperation Treaty (PCT) applications filed in 2018 came from Asia, with Europe and North America accounting for about a quarter each.

What does all this mean for the future of 5G technologies? As a recent article from the People’s Daily: points out, Huwaei has ‘absolute competitive advantage’ in 5G, with 1,529 standard essential patents. Behing them come Nokia, with 1,397, and Ericsson with 812. Already in Europe, the big 3 in 5G are working closely together. They have ignored the politically-motivated efforts of a small number of former colonisers and already signed up to work with Huawei.

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.