Sino US confrontation: what will be the impact of Apple Qualcomm and other American businesses?

category:Internet
 Sino US confrontation: what will be the impact of Apple Qualcomm and other American businesses?


Figure 1: the apple store in Shanghai In order to cut off the threat to American technology, the US Department of Commerce last week banned the China Telecom giant ZTE from buying American products for 7 years, on the grounds that the company violated a sanctions agreement that was reached last year. According to the international emergency economic power bill, the US government is also considering further restricting Chinas investment in sensitive technology. Analysts believe that as China and the United States move closer to the boiling point of trade, the two sides will be further showdown, and China may retaliate against American Technology Corp including Apple and Qualcomm, which could damage the companies income and block their plans. The battle is escalating? Such a move will make Chinas Countermeasures more stringent. The Chinese government has announced tariffs on 50 billion dollars worth of goods imported from the United States, including soybeans and Boeing aircraft. But since the U.S. exports to China last year were only $130 billion, Chinas anti - tariff measures against US imports may soon be ineffective. And American Technology Corp will raise its chips by using regulatory power to target a large number of businesses in the Chinese market. If the Chinese government wants to achieve the same effect of adding tariffs to US $150 billion imports, it needs to take creative action, said Jacob Parker, vice president of Chinas National Trade Commission on China and China. This may include additional mergers and acquisitions to review and extend existing censorship time limits, which may occur in the technology industry. Injury technology company Chip maker Qualcomm is a company caught in the middle of Sino US trade war. According to Canalys, a market research company, Qualcomm has lost $500 million in revenue after the ban on ZTE communications in the United States, since the Chinese company is always a high Qualcomm customer. Last year, 65% of the 40 million 200 thousand smart phones shipped by ZTE were using high pass chips, and the cost of each chip was 15 to 20 dollars. More damaging is the growth plan of Qualcomm, which is vulnerable to Chinese government policies. Figure 2: Qualcomms exhibition at the 2017 global mobile Internet Conference (GMIC). For example, Qualcomm is planning to buy $44 billion for the Holland semiconductor manufacturer NXP, but the deal is still under review by Chinese antitrust regulators, because many of NXPs customers are Chinese companies. For Qualcomm, this transaction is very important. It is seen as the key to diversify its customer base to achieve future growth. However, the Chinese Ministry of Commerce said earlier that it had found a difficult to solve problem after the preliminary examination and requested Gao Tong to resubmit the application. If the company is not approved before July, Qualcomm needs to pay NXPs pre agreed $2 billion breakup fee and completely abandon the acquisition. Apple may also be hit. Many of the Apple Corps devices are assembled in China, but they are sold in the United States. Therefore, raising tariffs will mean that the selling cost of iPhone will rise. In addition, American companies must deal with the potential impact of rising consumer nationalism. Recently, there have been calls for boycotting McDonald s, KFC and Apple in Chinese social media. A user wrote on Sina micro-blog: now is the time for us to boycott iPhone and other American goods. Another user said, I am proud of using HUAWEI! Hu Xijin, editor in chief of China Global Times (HuXijin), also appealed to micro-blog to support Chinese technology companies and support ZTE and HUAWEI. In the past, such measures had caused heavy losses to foreign multinationals. LotteGroup of Korea was forced to abandon its supermarket business in China. Andrew Gilholm, chief China analyst at ControlRisks, a consultancy, said: now this represents the real risk. (AndrewGilholm) In the past, the boycott of nationalism had never been very effective, but last year, with Chinas boycott of Korea Companies, this situation changed. A limited concession As the tension escalated, US Treasury Secretary Stephen Nouchine said he might visit China and trade talks with StevenMnuchin. The statement issued by the Ministry of Commerce of China confirmed that China had received the news of the us hope to visit and welcomed it. But some analysts expect neither China nor the us to give in. For the United States, Chinas recent concessions in the open finance and auto market are not enough to solve its fundamental concern for wide market restrictions and compulsory technology transfer. But China will not fully comply with the demands of the US, as Chinese companies take the lead in ten key industries, such as robotics, biotechnology and artificial intelligence, as pointed out by the Chinese manufacturing 2025 (China2025initiative), which is Chinas national policy. For this reason, the Chinese government will continue to give preferential treatment and financing to local enterprises, so that they can lead the US companies and control future technology. On the day of the opening of the mobile world conference in Barcelona, Spain, February 26th, a participant displayed a folding double screen ZTE AxonM smartphone. The ZTE incident only reinforced the Chinese governments view. According to Canalyss director of research Nickel Pentti (NicolePeng), ZTE is the worlds fourth largest supplier of telecommunications equipment and is at a critical moment for life and death after the sale of the ban, because many high-tech chips from the United States can not be easily replaced. Rajiv Biss (RajivBiswas), the chief economist at IHSMarkit, also said that suppliers in Taiwan and South Korea are unlikely to provide assistance to ZTE, because existing orders have been challenging their manufacturing capabilities. ZTE condemned the decision as extremely unfair and unacceptable. In another statement, ZTE also said it decided to comply with the technology ban and was looking for a solution. At the same time, the peoples daily appealed to local enterprises to upgrade their technology value chain and develop their own advanced chips. The global supply chain is vulnerable to politics, the paper wrote. Chinas technological exploration should not be interfered by us factors. Now is the time for China to make up its mind and develop local technology. (small) source of this article: NetEase science and technology report editor: Wang Fengzhi _NT2541 The ZTE incident only reinforced the Chinese governments view. According to Canalyss director of research Nickel Pentti (NicolePeng), ZTE is the worlds fourth largest supplier of telecommunications equipment and is at a critical moment for life and death after the sale of the ban, because many high-tech chips from the United States can not be easily replaced. Rajiv Biss (RajivBiswas), the chief economist at IHSMarkit, also said that suppliers in Taiwan and South Korea are unlikely to provide assistance to ZTE, because existing orders have been challenging their manufacturing capabilities. ZTE condemned the decision as extremely unfair and unacceptable. In another statement, ZTE also said it decided to comply with the technology ban and was looking for a solution. At the same time, the peoples daily appealed to local enterprises to upgrade their technology value chain and develop their own advanced chips. The global supply chain is vulnerable to politics, the paper wrote. Chinas technological exploration should not be interfered by us factors. Now is the time for China to make up its mind and develop local technology. (small)