Partly thanks to the long Labor Day weekend a highly significant piece of news from the other side of the earth hardly made any wave in the US. I say “partly” because Labor Day or not, most Americans do not care about what is happening outside the country, and they are happy to just look at China through the single lens provided by Washington.
Interesting Stories about the Huawei Mate 60 Pro
Let’s face it: Brainwashing happens everywhere as long as humans communicate with each other. This is why I pay little attention to the domestic surveys on China, as those views are too “contaminated” to deserve serious attention.
There is another point I want to make: I’ve asked my friend James in Berkeley whether he knows anything about Huawei and the new smartphone, which he does not have any knowledge of. I don’t blame him, though, because we all have limited time and attention. Americans are never short of colorful and dramatic domestic stories to watch or hear for, they are executed for not knowing too much about the outside world.
It is the Chinese who will report anything negative happening in the US, partly because they don’t have much exciting news to share with each other, plus of course the governmental censorship.
Back to the Huawei 5G phone, I recommend to everyone the report by the Washington Post. Here is another interesting detail from a Singapore newspaper (originally in Chinese on September 1st but later translated into English), which says that on August 29th, the US Secretary of Commerce “Raimondo met with Chinese Premier Li Qiang at the Great Hall of the People in Beijing. She later told the media that Li had asked the US to loosen its technology export restrictions on China, which she rejected.”
Being one of the “China hawks” in Washington, Raimondo’s response was not surprising, I’m pretty sure she said “No” to Mr. Li with all the hawkish pride and joy. I can’t help but wonder though if Premier Li made the request partly to make fun of the Americans — after he has learned the Huawei breakthrough long before the meeting.
Mate 60 Pro Is No Small Feat
Not only is the Mate 60 Pro a full-fledge 5G but also the world’s first smartphone to support satellite calls in places where no network signal can be found. For some travelers in remote and dangerous corners of the earth, this can literally be a life saver.
But this is also a 5G smartphone that is designed and manufactured entirely by one country — another world record that the US can’t claim for itself. This is no small feat if we consider the words of Chris Miller, the author of the book Chip War: “It’s hard to catch up because chips are the most complex manufactured good humans have ever produced.”
Americans must accept that in certain areas China can and will beat the US, which is why we should add another dimension of “mutual learning” to the China-US relations, like I pointed out in another post before.
Rethinking of Globalization
This milestone achievement teaches us several things. First of all, I doubt if anyone can still claim that everything China achieved so far has been stolen from the US. It takes two US presidents of Trump + Biden to jointly make this claim much less credible — through the unprecedented, “all-out” or wartime like export control plus company level sanctions.
But this claim plays an important role in the logics of China hawks: Because China would be nothing without the US supports with technologies and investments, China is liable to give it back to the US today by doing anything the hawks would like to see. Instead, China cheated just to enter the world market and global institutions like the WTO, which justifies Americans sanctions and encirclement.
But this logic is highly porous with many holes. Globalization is never meant to be one-way endowment but mutual gains. True, Americans did run into a distribution problem such that the gains from globalization have not benefitted many middle classes people. But anyone with a little common sense should not “throw the baby out with the bathwater,” and reject globalization altogether just because of the distribution challenge. The right approach is to admit the domestic weaknesses and fix the income distribution problem, then carry on with globalization, which has greatly raised global productivity like never before.
Unfortunately, many (or most) American politicians see globalization as a zero-sum game: Your gain is our loss. This thinking has power because it fits the surface of what is tangible perfectly well: When they cast their eyes to China, they see it lifted millions of its people out of poverty, while many Americans in the manufacturing zones (like the famous Rust Belt) lost their jobs.
But what it looks like is not the same as what it really is.
What has happened is behind us, the real danger is for the US to carry this zero-sum thinking to the post-globalization era — consciously or unconsciously. Because China’s gains can only come from Americans’ loss, we must do everything in our capacity to slow China down, even if that means some loss of ours. After all, our loss can’t be too bad as long as China does not gain, again following the logic of “your loss is our gain” or vice versa.
This zero-sum interpretation of globalization has shown up on the American view of China’s Belt and Road. At its core, Belt & Road is just Phase II globalization, following the same path as American FDI in developing countries, China being one of them back then. The only difference is that this time it is China and Chinese firms that have surplus production capacities looking for places to make them productive, not the American firms. But American politicians from Biden down have been demonizing Belt & Road or looking at it with a highly suspicious eye, completely ignoring the fact that the project has benefitted many third world countries.
Having Numerous Allies Does Not Guarantee Winning
The second thing we can learn from Huawei Mate 60 Pro is that ideological allies, no matter how strong and fearful they may look, do not have the power to crush or kill a foreign company, let alone a sovereign country. The limit of allied power has been proven by the ongoing Russia-Ukraine war but the US launched tech war against China is equally telling.
Someone tries to defend the sanctions by saying they are still useful — if we manage to make it less “porous.” But the tech encirclement against China was never meant to be “porous.” It was as complete as humanly possible — during a peacetime, shown by the coordinated bans by the US, Japan and Netherland, all the key players in the chip making business.
Washington has shown sufficient determination to kill Huawei for good, and for 3 years it has seemed to work as planned at least in the 5G field — until the Mate 60 Pro came out this August.
The US Defeated Itself by Setting a Wrong Goal
I won’t defend the tech war launched by the US. It’s a war by a nation’s government against a single private firm in another country. There are also several allied countries against one country. Finally, it is a fight between several technical first movers and a single late mover in terms of know-hows. It’s an ugly and shameful war that brings collateral damage to multiple stakeholders, ranging from American multinational firms to many third world countries.
Normally such a highly asymmetrical warfare can only end with one side quickly surrendering and the other side declaring complete victory. We must ask ourselves what went wrong this time with Huawei.
In my view, the US made two mistakes: It set a wrong goal and it went the wrong path.
What is the wrong goal? The US expects a complete victory by totally and quickly defeating the enemy, when in today’s world the right goal should be “co-existing win” rather than “eliminating win,” which means to wipe out the enemy altogether, or at least to achieve a landslide victory.
In Ukraine and in China (i.e., in military warfare and the tech war), Washington has overestimated its own power and resources, which lead it to the same mistake of implicitly asking for eliminating win.
The problem with that goal, no matter how attractive it is to Washington, is to turn the war into an existential fight for the enemy, while the stake is much lower for the US. Nobody truly believes the US will collapse if Putin wins the war in Ukraine — even though believe or not, many US hawks are saying exactly that to make the Ukraine war result far scarier than it really will be.
But this is America, where any dumb idea will find some followers or believers. And I am not saying that sarcastically, because all ideas should have a market. This is only normal for human society.
Anyway, from existential to co-existing requires a giant step going from classic physics to quantum physics. The latter can avoid self-defeating while the former cannot.
The US Has a Self-Defeat by Wrong Strategy
If the wrong goal is a problem, following a wrong path will bring disasters.
Unfortunately this is what happened in Washington.
In the business world it is well know that the best approach for maintaining market dominance is to play the “complacent game,” where we move into a market and sell goods with low price, making the local people too comfortable to try new things of their own, as the price of trying is simply too high.
The Biden admin did the opposite by making the chips and the related equipment extremely scarce. Its wartime like export control came with completeness and thoughtfulness. Unfortunately, the more it moves to that direction, and the better it executed, the higher prizes it sets up for Chinese firms like Huawei.
It’s like a high school Prome night dance party. Before the tech war there was no clear winner as several boys and girls all looked equally well in performance. Suddenly there came a millionaire to the party and declared a prize of $1,000 to anyone who can do Tango the best (or to sing a Taylor Swift song the best). This raised the level of adrenaline among all the competing boys and girls and everyone tried 10 times harder than before to win the prize.
That millionaire turns out to be from Washington, and Huawei is one of the best boys to win the final prize. The sad part is that nobody appreciates the millionaire even though he paid the money, because they see him as the enemy trying to destroy the Prom.
You don’t have to be a genius to know which is safer to national security: (1) Nobody in China can produce EDA software and make 5G chips by themselves, versus (2) Huawei and a bunch of others can.