The New U.S.-China Rivalry: A Technology Race

https://www.nytimes.com/2018/03/06/business/us-china-trade-technology-deals.html

by montrose • 8 years ago

75 65 8 years ago

mtgx• 8 years ago

The US used to call out China over its human rights abuses. That seems to have stopped around the start of Obama's second term. Now the US has gotten to the point where its president praises China's new permanent president for being so brave to do that.

My hope is the US' next president will be one that cares deeply about civil rights and will start calling China out in the future, as its human rights abuses inevitably increase under a dictator with all-seeing surveillance eyes.

_m8fo5• 8 years ago

What are some of these violations in your view that China should be called out on?

EDIT: Removal of previous question since posters have interpreted it as trolling (though I assure you, it was not).

Slansitartop• 8 years ago

Does the US really have any right to be calling out any country for human right violations?

Yes, yes it does. You don't have to be a saint to point out bad behavior.

lotsofpulp• 8 years ago

It could be due to a shift in power. The US isn't the only game in town now.

GijsjanB• 8 years ago

The pot calling the kettle black? Aside from that, we share the hope for a US president who cares deeply about human rights!

marnett• 8 years ago

Interestingly enough, China answered by publishing a list of human rights violations committed by the U.S. [1] (I could not find the original transcript).

[1] http://english.gov.cn/archive/publications/2017/03/09/conten...

factsaresacred• 8 years ago

its president praises China's new permanent president for being so brave to do that.

I believe that was said in jest during a speech at a charity dinner.

vatueil• 8 years ago

The event was described as a political fundraiser for Republican donors in all the reports I've seen, not a charity event.[NR, CNN]

The part about having a President for Life in the US was definitely presented as a joke, though Trump's admiration of "strong" leaders has been a recurring sentiment.[The Atlantic]

[NR]: https://www.nationalreview.com/2018/03/donald-trump-xi-jinpi...

[CNN]: https://www.cnn.com/2018/03/03/politics/trump-maralago-remar...

[The Atlantic]: https://www.theatlantic.com/amp/article/554810/

dang2• 8 years ago

Let's not have yet another generic political/national argument. They're all repeats of the same few basic patterns. That makes them predictable and therefore uninteresting in HN's sense: https://news.ycombinator.com/newsguidelines.html. Plus they almost all turn into flamewars.

Good HN discussions on large, divisive topics are not generic but specific, and engage with the actual content of an article. More on this if anyone wants it: https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...

maxxxxx• 8 years ago

"Now the US has gotten to the point where its president praises China's new permanent president for being so brave to do that."

Trump really seems to have a hard on for wannabe dictators like Erdogan, Putin and now the Chinese guy. Hard to understand.

costcopizza• 8 years ago

I just realized this the other day.

You'll hear qualms about trade unfairness and the occasional blatant copyright/knockoff culture, but hardly ever any mention of human rights.

_m8fo5• 8 years ago

Political tangents aside, it will be interesting to see how this race unfolds as the next recession winds up (which is inevitable, really).

The seemingly limitless amount of capital, technological, human and otherwise has led to this arms race of sort, but will both countries be able to focus on this if there's a significant crisis? How much of this stuff is just a bubble?

arcanus• 8 years ago

A good point. Conversely, central banks and governments fight recessions with expansionary monetary policy. Thus, as a recession hits government may reduce the cost of capital to VCs, and improve R+D (at least in defense spending and government research).

aaavl2821• 8 years ago

That could happen, but it is likely there will be a significant contraction in VC funding at least initially in the event of a recession.

Firstly, the very low interests rates in the US and worldwide the last decade provide very limited room for governments to reduce cost of capital. Current fed funds rate is 1.42% after being essentially 0% since 2009. In 2007, the rate was 5.25%. In 2000 before the dot com crash, fed funds rate was 6.51% (dropped to nadir of 1% by 2004). [1]

Unless interest rates rise dramatically before the next recession, the US govt will have the least monetary policy ammunition ever to respond to a recession. So there may not be that much reduction in cost of capital.

Perhaps more importantly, any further fiscal tightening in advance of a recession could be very destructive to venture capital. One of the reasons VCs have so much cash now is that investors are chasing yield -- with govt debt at all time low rates (meaning high prices), and negative interest rates for some major governments, and with the stock market in one of its largest bull markets ever, investors have been investing into ever riskier asset classes. the laws of finance state than when interest rates go up, bond prices fall, and stock prices fall as well [2, 3]. yield will become cheaper (ie you can get higher return for lower risk: imagine getting 5% from a government bond today, and an expected return of 8-10% for large cap stocks: no one would invest in super risky VC in hopes of maybe 12-15% returns). with attractive returns available for lower risk, investors will cycle away from investments like VC and towards large cap stocks and bonds

that's the theory, and in reality you observe a contraction in VC after recessions (post 2000s, post financial crisis). then capital leaves the VC space, so deals are less competitive and prices are lower, and the VCs that stick around make lots of money, then other people try to get in on the VC returns, prices go up again, returns go down, and the cycle goes on

[1] https://fred.stlouisfed.org/series/FEDFUNDS [2] https://www.investopedia.com/investing/how-interest-rates-af... [3] https://www.investopedia.com/terms/c/capm.asp

vinchuco• 8 years ago

Can you give someone clueless about this recession stuff some pointers or material to mull over? How to estimate timeline and magnitude? Why inevitable?

_m8fo5• 8 years ago

I won't mislead you by pretending to be an economist or expert, but you should look up the "business cycle". As the name implies these booms and busts happen pretty periodically. In the past it's been approximately every decade.

As for the magnitude, I can't really speak to that much. Perhaps someone more knowledgeable will chime in.

atmanthedog2• 8 years ago

Well, personally, I subscribe to: https://en.wikipedia.org/wiki/Random_walk_hypothesis

chapill2• 8 years ago

If the US blocks a Broadcom/Qualcomm merger, what's to stop ${US_Corp} making a hostile takeover of Qualcomm instead?

Clearly the two giant governments are battling over control of the closed source baseband backdoors in all mobile devices.

asdsa5325• 8 years ago

Note that the US can't stop Broadcom from just buying a majority of Qualcomm shares.

zeusk• 8 years ago

Actually, they can.

Also - by securities law you're required to report and even make a bid for the business once you cross a certain threshold of ownership.

SubiculumCode2• 8 years ago

While China has real innovators, particularly in manufacturing and AI tech, if China continues on its path toward total surveillance of its people, I cannot see China continue to innovate over the long term. Innovation often entails replacing the old with new interests and stakeholders. In a total surveillance state, stakeholders would have motivation and the means to squash innovative change. So I see the future of homegrown technical innovation in China as questionable, and bear.

China's history of innovation over the also decades is also a story of supplementation by pervasive, state-sanctioned corporate espionage and theft of intellectual property from the rest of the world. If China continues on its current path, I can see actions by nation-states to boost their defenses against espionage and IP theft by China.

wpasc• 8 years ago

Agreed with this tenfold. Innovation often implies disrupting the status quo; China in many ways is entrenching the status quo in every single way possible.

dnomad• 8 years ago

This is ]conjecture.

In reality the CPC are technocrats in every sense of the word. Many of them are engineers and they possess an engineer's faith in innovation. The idea of them squashing innovation is silly. Look at the enormous investments in electric cars, AI, mobile computing and genetic engineering. Westerners will deny it until it's way too late but the amount of innovation going on in China right now is mind blowing.

Which is the point -- the Chinese will more than likely win this technology "race." Because the West isn't really competing. The days of Western governments pouring real wealth into research and development is over. What you have is very few highly innovative firms and a few military contractors competing against the highly coordinated political-economic-military complex of China. The outlook does not look good.

I suspect this is why ultimately companies like Apple and Microsoft and even Tesla are so focused on getting a foothold into China. These guys know where the future is and they want to be at the table when it happens.

SubiculumCode2• 8 years ago

It is hardly baseless. If the CPC has done well to allow innovation, it is likely because 1)China is enjoying the easy growth of an emerging economy where outside wealth is willing to pay you to pollute your lands for trinket manufacturing. 2) The party ALLOWED free thinking at Universities, and 3) the party acted under rules of meritocracy.

Under the tightening grip of surveillance in China today, and the centralization of power by the president and his "anti-corruption" campaign against the party and businessman, I don't see how innovation will persist. If the president and his party allies get entrenched, then I do not see how the party can stay a meritocracy, and without that meritocracy, I don't see how innovation won't get squashed.

Edit: thank you for removing the word baseless.

petra• 8 years ago

Could this be a good explanation why the interest rate is kept so low for so long ? as a way to encourage money to go to innovation ?

basicplus2• 8 years ago

Given that companies from all over the world have moved enormous amounts of manufacturing technology into china to take advantage of low wages, you cannot ignore the fact that a huge amount of technological knowhow has been freely given to china.

jbob2000• 8 years ago

China has been losing technical talent left right and center. If they want to compete, they need to be able to attract top talent to their country. There's a reason why their military and space hardware is Russian or Russian-derived.

There is just no way someone is going to move from LA or New York to Beijing. Maybe Hong Kong. The differences in living standards is huge, I don't think you could pay people enough to get them to move.

seanmcdirmid6• 8 years ago

HK is not a tech startup place, programmers outside of banking and finance get paid very poorly compared to Shenzhen. I lived in Beijing for 9 years and found that, besides the air pollution, everything was definitely workable. I only left because when my wife and I were expecting a baby. Beijing has gotten better recently, though still too bad for the baby, while Shenzhen has always been better and comparable to Shenzhen.

China has plenty of its own talent and has been attracting back those who went overseas. While I agree that they will need to attract worldwide talent in the long run to fully compete with the USA, they are not in a bad place ATM.

Gustomaximus• 8 years ago

This is changing. China are actively pursuing top scientists that have left the country and giving them large budgets on return with more freedom to spend as they see fit. Many people interesting in the science and opportunity to create will lap this up.

And not sure if you have been to China but outside pollution, they have very good living standards of you have the income, though obviously this is subjective to what is important to you. But say for example, go stand on the Bund in Shanghai. It feels like London meets NY in China.

coldtea• 8 years ago

China has been losing technical talent left right and center. If they want to compete, they need to be able to attract top talent to their country

Well, they have a 1.4 billion pool to draw from, from themselves alone.

There's a reason why their military and space hardware is Russian or Russian-derived.

Because they're starting out on those things. But their stuff at least works -- analogous us endeavors of late have been failing after spending tons of money (F35 for one).

zdky2• 8 years ago

Not sure about Americans, but more and more Chinese are moving back to China when they could have lived in LA or New York or anywhere they want. Also, Hong Kong is not as important as it used to be. It's also very common to see people from Hong Kong and Taiwan moving to China mainland to work nowadays, especially if they work in tech.

qiqing7• 8 years ago

There is something rather disingenuous about the way the article is written: it takes advantage of an inattentive reader who only reads the title and not the actual article text. Most readers will probably miss some things.

* Broadcom is a Singaporean company, not Chinese.

* The article asserts that Huawei and other Chinese chip manufacturers will indirectly benefit from the proposed merger.

* Cfius, who is looking closely at the Broadcom-Qualcomm proposed deal, looks closely at other investment / merger deals from China for national security reasons.

.... and most readers will at this point incorrectly assume that Broadcom is a Chinese company, having forgotten what was read in the first 3 paragraphs.

mlb_hn• 8 years ago

I see that as well. There's been an interesting trend over at least the last several months where NYTimes has been promoting fears about China (No judgment as to the veracity of those fears).

Definitely something to keep in mind when reading pieces like this.

qiqing7• 8 years ago

I've noticed that too. While there are legitimate criticisms of Chinese surveillance over Chinese social media (just like there are legitimate criticisms of American surveillance over American social media), I can't help by worry about something else: that this is how it begins. I worry that people who look like me will be deemed suspicious and discriminated against.

I worry when the FBI Director claims all Chinese student organizations are under suspicion because they have evidence that one university student club accepted donations from an embassy in order to fund a Chinese New Year party. Can you imagine if a student organization supporting American students studying abroad was deemed suspicious because the US Embassy bought them a turkey or two at Thanksgiving?

shanghaiaway• 8 years ago

＞There's been an interesting trend over at least the last several months where NYTimes has been promoting fears about China

10+ years. NYT is at the frontier of American propaganda, as we saw with their Iraq lies following 9/11

echevil• 8 years ago

That's more like a common practice of all western media, and it's not just the past few months. I'm glad you noticed.

seanmcdirmid6• 8 years ago

The article is not misleading at all if you actually read it. It can only be considered twisted because the narrative contains non trivial details, which I don’t think the author could have avoided considering the facts at hand.

qiqing7• 8 years ago

The article also omitted this crucial detail that was mentioned in the PC Mag coverage: "Broadcomm added that most of its board of directors and senior management team is made up of Americans. It also contends that the company's plan to buy Qualcomm will no longer fall under CFIUS's review when Broadcom finishes relocating to the US."

Yes, I did actually read the article (unlike many commenters going on about China this or China that), which is why I found the title misleading, since Broadcom isn't even a Chinese company. I'm glad that the other commenter linked to that article because that author doesn't forget to remind the reader "However, Broadcom is not a Chinese company."

zdky2• 8 years ago

The only fact reported by this article, is that a Singapore company is trying to acquire a US company, and the author has to make it ALL about China. If people didn't read the article careful enough, they'd probably not see the word "Singapore" at all

ausjke2• 8 years ago

it might be deeper than that, I won't be surprised if Chinese has some big hidden stake in the money involved for the merger, end of the day, money talks, politics follows. by the way this is not unique to any country, they all do this sort of things.

qiqing7• 8 years ago

I won't be surprised if ...

Do you think you would be more surprised, less surprised, or about the same, if the situation were reversed? Let's try a thought experiment.

Hypothetically, say, a Singaporean company was trying to take over a Chinese company (both companies in this case have Chinese citizen executives), and the Chinese government was trying to block it. And let's say there's news coverage apropos of nothing, that American companies would be the indirect beneficiaries, so the US was (wink, wink) behind it all. What is your level of surprise then?

¯\_(ツ)_/¯

douglaswlance• 8 years ago

Could a technological race between warring tribes of primitive homo sapiens be responsible for the human intelligence explosion?

seanmcdirmid6• 8 years ago

No, it was more likely the diffusion of technology (agriculture, writing, the wheel, and so on), not the competition between civilization, that led to humanity’s intelligence explosion.

JumpCrisscross• 8 years ago

Do you have evidence for this claim?

analogic• 8 years ago

Well first one got idea to use bone to bash heads from mysterious black box, the rest, as they say, is history.

atmanthedog2• 8 years ago

It seems much more likely to just be invention of fire and control of fire. Turning cellulose into energy that promotes some sort of evolutionary advantage is pretty limited in the macroscopic biological world. Sure, cows and the like do it, but only by enlisting the aid of bacteria and having four stomachs, etc. This excess energy and exclusive ecological niche then allow for more complex social systems, feeding into some sort of positive loop selecting for intelligence.

That's all conjecture from me, but it seems to make sense from basic principles.

Sephr• 8 years ago

NYT is portraying this issue as a technology race when it's really just a surveillance infrastructure conflict of interest.

Qualcomm and Broadcom make closed source basebands, which are used (backdoors) and abused (zero-day exploitation) for spying via wireless ISPs on behalf of their respective parent governments.

If Broadcom acquires Qualcomm, it may become easier for some governments to locate firmware vulnerabilities which can either be fixed to prevent U.S. surveillance or exploited to expand local surveillance powers.

chapill2• 8 years ago

I found this pcmag link more enlightening than the NYT article.

https://www.pcmag.com/news/359702/us-broadcom-qualcomm-merge...

Specifically, the last paragraph,

"Broadcomm added that most of its board of directors and senior management team is made up of Americans. It also contends that the company's plan to buy Qualcomm will no longer fall under CFIUS's review when Broadcom finishes relocating to the US."

It seems CFIUS wants solid assurance that this happens so the US can continue scooping up all the communications of everyone world wide.

The US government didn't appoint Qualcomm winner of the LTE market with IP protections just to let them sell it off to a company outside US control.

JudasGoat• 8 years ago

There is a technology race we have lost due to Chinese government investment. 2018 will be the year China passes the US in 300mm wafer production. https://www.semiwiki.com/forum/content/6608-could-china-take...

The New U.S.-China Rivalry: A Technology Race

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