US-China Tech War: Don't Put All Your Eggs in One Basket

 US-China Tech War: Don't Put All Your Eggs in One Basket

China Times Editorial (Taipei, Taiwan)

May 5, 2019

Translation of an Excerpt

Since the Chinese Mainland acceded to the World Trade Organization (WTO), it has been welcomed by global capital and markets, creating huge trade surpluses, and through various means, it has secured new and high technology, advancing by leaps and bounds, and making US-led Western countries feel threatened and harbor alert. In recent years, in order to encourage the people's patriotism and sense of honor, the Chinese Mainland has continuously publicized strong national strength, stating that in certain technological developments, it has overtaken the United States, and has elevated its international influence in various forms, establishing the "Asian Infrastructure Investment Bank" and the "Silk Road Fund", using all efforts to push for the internationalization of the renminbi and making it an international foreign exchange reserve, vigorously promoting the "One Belt and One Road" initiative, promoting "Made in China 2025", and also filming patriotic movies such as "Amazing Country", "Wolf Warriors", etc. This eventually pushed the US to a breaking point and it thus launched the "US-China trade war", gradually turning into a tech war, forcing Beijing to the negotiating table, making concessions and modifying certain actions; the US attempt to restrict China's development while the US still has the upper hand has been obvious to all.

In the long-running trade talks, China has again appreciated that Deng Xiaoping bequeathed instructions yesteryear that we "lay low and bide our time", thus "Made in China 2025" quickly disappeared from various media outlets, so as not to become a target of all Western countries. Nevertheless, the investments that China has injected in technological research and development (R&D) and its ambitions have not waned or idled. Last year, the amount of China’s investment in financial services and technology reached nearly half (46%) of the global sum of US$53.3 billion, a high proportion beyond imagination. China’s approach in acquiring the latest technology through mergers and acquisitions in advanced countries has elicited heightened tensions in the United States, Germany, and other countries, which one after another intensified their vetting processes in order to prevent the incessant “drain” of high-tech to China.

With regard to the great trend of global technological development, how should Taiwan, which is situated in the long-term competition of trade and technology between the US and China, face it is a vital and serious question. With respect to important new technologies, such as artificial intelligence, big data, 5G, electric vehicles, the Internet of Things, robots, biotechnology, etc. in as much as both the East and West have their respective accomplishments and respective strengths, Taiwan does not plan to lag behind in this competition. There is a need to utilize all resources and seek all possible partners of cooperation, but there is no need to confine our attention to the US, Europe, and Japan, on whom we traditionally rely. Especially, the Chinese Mainland’s markets are huge, and "unicorn" or "quasi-unicorn" enterprises are numerous (privately held startup companies valued over US$1 billion); they ought to seek as soon as possible business opportunities of cooperation or joint ventures, and seek to elevate marketing performance through the related network of cooperation partners on the other side of the Strait.

Our enterprises ought to set up R&D bases on the other side of the Strait, fully utilizing Mainland R&D talents whose quality has become more and more outstanding, and, depending on the fruits of R&D, in accordance with the US-China trade and tariff situations, decide whether to produce on the Mainland or in Taiwan, choosing the mode of cooperation best to Taiwan factories or Taiwan businessmen. And the government's Mainland policies and norms may also need to undergo review and necessary adjustments in consideration of the new needs of the businesses.

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