CHIMERICA | The low intensity war between the United States and China

The current world economy depends [to a large extent] on what the most important agents do or do not do, in this case China and the United States of America, a tense commercial relationship that we will call “Chimerica” ​​due to the conjunction of their names. The administration of Donald Trump has included one of the most important Chinese companies, Huawei, in the “commercial blacklist”, something that it did in 2017 against ZTE, leaving it almost bankrupt. It is time to evaluate the reasons, the implications and the risks behind this commercial relationship with a taste of low intensity warfare.

Why was Huawei included in the commercial blacklist?

On the inclusion, of the Chinese giant Huawei, in the commercial black list of the United States, many motives can be theorized, such as unfair competition, copyright issues or piracy, including issues related to the political tendency of each participant in this conflict of interests. powers; However, the truth is that it is a new type of “war”, a confrontation of very low intensity, to seize or “balance” world power. In this struggle the differences with arms are not solved, but with laws, commercial fences – like the case of the commercial blacklist – and many other political weapons. The United States, with Trump in the lead, has accused the Chinese giant Huawei of helping Beijing in espionage, for which they have included the mobile phone company in its “commercial blacklist”, which means prohibiting operations with suppliers and customers. aliens who pose “an unacceptable risk” to their safety. Therefore, companies such as Qualcomm and Micron, in hardware and Google in software, will not be able to provide products and services to the companies on the list without special permission from the US government.

How will the inclusion of Huawei on the commercial blacklist affect the economy?

A similar measure that occurred in 2017 against ZTE left it on the verge of bankruptcy. Huawei, however, has been preparing for a possible similar scenario; Huawei has stored enough chips and another component to keep its business running for about three months, while restricting access to US technology. Since the Chinese company requires American software and semiconductors for its business, apparently it has been preparing for this moment, developing its own technology, so it is very difficult [without having insider information] to know the true impact of this measure, which So much is convenient for the United States, because companies like Qualcomm will see a very strong drop in their sales level, since Huawei is one of its main customers, so it will stop selling millions, which will also affect the US economy. It can not affect [practically nothing] in the economy if it affects the rest of the world, so it is also expected to see a drop in the values ​​of the different stock exchanges in the world.

The issue must be resolved within a reasonable period of a couple of months, resuming relations between Washington and Beijing, in which it seems that the cellular giant, Huawei, is a piece of negotiation. A total ban on Huawei would mean that President Trump’s goal is to paralyze China, which may also have risks for the United States. This scenario is delaying the arrival of 5G networks; in fact, the United States is pressured to avoid using Huawei in 5G networks, commercially and economically paralyzing the Chinese company. This is a hidden war that is being waged in the economic field and frankly it is difficult to see how it will end.

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