‘Some wars do not need bullets & ammunition, still,

their intensity and impact can be felt across the globe’

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From a dispute over ‘Chronic unfair trade practices’ & ‘Intellectual property theft’ to a technology war between two economic Super Giants, USA and China, that has implicitly threatened to rip the globe apart into two pieces.

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Who will win the fight for technological supremacy and domination? Will the countries across the globe be forced to take sides and what will the impact of this digital divide have on the future of the global economy? Hongkong, a bustling city of over 7 million people and a gateway between China and the rest of the world. The Special Administrative Region is home to some of the busiest ports ferrying goods to and from China. But today Hongkong has been caught in the middle of an intense trade war between the two economic giants. Similar to many other Asian tiger economies, Hongkong is highly dependent on China for trade.

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For example, Imports from China alone account for almost half of the total imports compared to just 5- 10 % from the US. Its economic fortunes such as tourism, retail sales, and real estate are increasingly tied to the mainland. However, the escalating US-china trade war has now dampened investment sentiment & consumer confidence. The volumes are down by somewhere around 8-10% Pre-Covid period and normalcy is not expected to come anytime soon.

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The United States has gained the reputation of being the world's most powerful country because of its political, economic, and technological dominance coupled with its ability to project power on a global scale. However, the world’s second-largest economy China is catching up fast. It is now not only wealthier than ever but also it has advanced further technologically and recently became militarily powerful.

 

A new cold war is ripening between these two economic giants. However, this time it’s not a ‘war over territories’ but a ‘nationalistic battle for technological superiority and dominance’.

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China’s telecommunication giant ‘Huawei’ is among the few technology companies which have been caught between these two feuding economic powerhouses. Huawei has been viewed as a national security threat by the US security agencies and has been banned from buying or acquiring American parts and technology.

 

Is Huawei a technology company or

a proxy for ‘Beijing’s intrusive security apparatus’?

 

It is an inescapable fact that Chinese companies are required to maintain a close relationship with their home government. They are accountable to the Chinese Government. On the other hand, it is equally important to recognize that keeping Huawei out of American markets or banning American companies from selling components to Huawei does not necessarily make the US completely secured against Chinese eavesdropping, spying, or surveillance. Just because the supply chains are disconnected does not mean that it cannot be intervened. Analysts believe the matter has completely blown out of proportion. As per them, the US is targeting Huawei solely for commercial purposes.

 

Huawei is now the largest telecom equipment producing company. It has even overtaken ‘Apple’ as the world’s second-largest smartphone provider. It has an impact on protectionism and trade wars on the Indian and global economy. It also emerged as the leader of new telecom technologies including the ‘5G telecommunications’, which is seen as the next milestone in the digital revolution. The race to install a 5G mobile network reflects this growing rivalry. One that will determine the political and economic fortunes of nations from many decades to come. Further adding to the fire, the US companies were ordered to not supply their parts and products to Chinese companies.

 

Technology companies are in high requirement of these parts as the constituent of their products. Recently, Google has announced that it will not let its licensed software to Chinese mobile manufacturers for their upcoming flagship series which will result in a business loss of billions. Since China always works on a self-sufficiency model, it can make and develop its operating systems, chipset, and other equipment to reduce dependency on the US and other countries. As per recent developments, it has already started working on it.

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The question arises what impact will it have on other countries.

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If we talk about India, manufacturing was never our unique selling proposition. We were initially known for agricultural produce which was later taken over by the IT industry. All thanks to the cheap intellect we are supplying to developed nations, predominantly the United States for a long time.

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As a token of appreciation, recently the restrictions were imposed by the US government on Indian H1B visas that can result in significant job loss. Our politicians have launched numerous schemes as if they are grandeur events, they all were fantastic on paper but failed miserably. Thanks to all those masterstrokes that have been played by our government from time to time. Countries like us are exploited by China and we can’t do anything because despite levying so many duties, their product is still cheaper and more reliable than ours. The USA is not innocent either as they take up our best minds when they require us, but when we require them, we are often manipulated. A country where development is merely a political doctrine and government never passes ‘real benefits’ to its citizens. Would it be wise to take products from America, whose products are outstanding, but expensive too? We need them because we cannot be self-sufficient overnight.

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It will take time to heal the damage that has already been done. Favoring one will mean disagreement with the other. American products are out of pocket and Chinese products are presented as ‘against their nation’. India is like a monkey that has been stuck in between the fight of two cats. Ever wonder, that due to all this turmoil, unintentionally we are heading towards ‘Protectionism’ which was considered an omen for the Global Business and Economy, for which the concepts of liberalization and globalization were introduced.

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It is a vicious circle that will never end. Where one country imposes some restrictions on another country and that country replicates the same with the imposing country and with other countries as well. It is a well-known fact that no country can be self-sufficient. It needs the aid of other countries to grow itself. No matter how good and advanced ‘self-proclaimed beasts’ technologies are they will be requiring resources to produce their products & most importantly a market where they can export their product and services.

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The same applies to countries like us also, we are at our nascent stage, and we are recognizing our potential and are working on it. We need their support whether it's China or America, as they are like father figures of the global economy. The more the tensions are increasing, the more it will make people suffer because ultimately the burden of the tariffs is passed on to the consumers & they have to bear it out from their own pockets. These pockets have already been dented due to inflation and increasing unemployment.

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The COVID-19 crisis is creating a hell out of every sector and has put everyone on knees be it America, China, EU, India, Brazil, or anyone. The times are tougher than ever before. It is time these giants show some modesty in global interest and reconcile their differences.