Huawei Warning: In the US-China Cold War, the Industrial Chain Has to Choose Sides?

 Huawei Warning: In the US-China Cold War, the Industrial Chain Has to Choose Sides?

United Daily News Editorial (Taipei, Taiwan)

May 25, 2019

 Translation of an Excerpt

Trump has dealt another heavy hand, blacklisting Huawei as a target of export controls; transnational enterprises in the US and Japan have successively announced the suspension of shipments and provisions of technical services to Huawei. The United States has launched a tech war against China, attempting to suffocate the development of Huawei. However, Wall Street and global stock and foreign exchange markets have already suffered one step ahead, hurting also Taiwan’s leading industries in the Taiwan stock market. To this time’s "Huawei storm", Taiwan's supply chain, in this tech war, probably has no luck to be spared.

Huawei is not only a bargaining chip in US-China trade talks; in the progression of US-China strategic competition, it is the main battlefield for technological competition, as well as the wrestling of national security and diplomatic interests. Steve Bannon, the hawkish former White House chief strategist, even publicly stated that it was ten times more important to shut down Huawei than to reach a US-China agreement. Thus, we could see that a new "technology cold war" has raised its curtain. Leaving aside whether a tech "iron curtain" will emerge, what is worth noting for Taiwan is: As the world's most valuable electronic manufacturing service industrial chain, whither we go?

What is intriguing is that the United States declared a 90-day grace period; the industry circle has reported that Huawei has deployed the “de-Americanization” of its supply chain, increasing its procurement from Taiwan. If the United States determines that Taiwan is a loophole for the ban, then our industry operators will probably be monitored; at that time has the Tsai government the capacity to deal with the situation?

At this time, the most serious trial for Taiwan's electronics manufacturing service industry is not only that the industrial chain does not know what to depend on, what’s more, it will find difficulties in continuing the growth mode generated in technological innovation relying on free trade and globalization in the past 30 years. Translated into the vernacular, with the decline in momentum by the main dynamo for economic growth, on what will the momentum depend for Taiwan in sailing against the winds?

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