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China exodus

The common thread is to move production of US-bound goods to lower-cost nations that will not suffer the tariffs imposed on China by Trump.

The Cold War was a clash between two superpowers with differing views on how the world should be run. The Tech War is more than just a struggle for market dominance.

China sees the role of technology in startlingly different terms than the US, and in trying to dominate the tech market, China seeks to further this ideology.

The Chinese government is aware of what MIC 2025 must mean. Short term pain for a long-term gain.

Specifically, in the last six months, there has been a massive shift in manufacturing contracts away from US-owned companies like Qualcomm towards China-friendly MediaTek. MediaTek SoCs are now commonplace among the bulk of the mass-mass market devices.

Though MediaTek is based in Taiwan, a country with a long, complex, and sometimes violent relationship to China, the company maintains significant links to the Chinese government. It is apparently working with BBK (the company behind OPPO, vivo, realme, and OnePlus) to develop smartphone chips that comply with China’s MIC 2025 program: that is, components developed, designed and made entirely in China.

In a similar move, it’s been reported that Huawei, the single biggest smartphone manufacturer in China, is also talking to MediaTek to take over the fabrication of its Kirin Chips and modems. 

Stop press – the Tech War is escalating

China must overcome significant obstacles if it is to achieve MIC 2025. Most obviously, it will not be allowed to use ARM technology, or US patented technology and must develop alternatives. Part of the tech war fallout will be the raft of accusations that China has stolen US tech. But you know – no amount of western law and layers can stop that. The genie is out of the bottle.

MIC 2025

Beyond these technical differences, however, there also lies a huge difference in the way that the two tech superpowers – the USA and China – view the technologies they are developing. Much of this is based on the political and social histories of the two countries.

 In the USA, there remains an assumption of user privacy and corporate independence. China, by contrast, seems to be building surveillance and technology transfer into its tech products from the ground up.

A quick look at recent news stories is enough to confirm this. As we’ve previously reported, China has used government-sponsored apps to spy on users and has deliberately put back-doors into new IT and (more worryingly) IoT products.

China spies

Another worry is how much impact the Chinese tech renaissance will have on users outside the country. Within China, the government will ban non-Chinese tech from being used by 2025.

On the other hand, the USA’s power to limit Chinese tech used within the US is not only more limited than it is in China, but it is also ‘sabotaged’ by the country’s free-market mentality.

Companies take advantage of this ‘freedom’ through the use of a sophisticated and ‘democratic’ system based on acquiring positive reviews. When Chinese products receive the proverbial ‘thumbs up’ from US consumers, things get even trickier for the American government. 

The limited power of the US to control or limit Chinese tech is evident from the scandal that erupted when the US government tried to block Huawei from the 5G rollout within the US.

China owns and operates a growing number of SaaS-based businesses that are widely and critically used by US firms. 

Perhaps even more worrying is the fact that China owns half of all free virtual private network applications (as of early 2019) and therefore that technologies used by Americans to stop their own government from spying on them could be sending the same data to China.

Tech Wars is ultimately about the Future: AI and Skynet

It is also apparent that the Tech War between the US and China is only just beginning. As Scientific American reported earlier this year, the next battleground is likely going to be over AI. Alongside the MIC 2025 program, the Chinese government has now set an aim to be the global leader in AI technology by 2030.