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Shen Jianguang: The ZTE Incident Announced a Turning Point in Sino-U.S. Relations?

April 18, 2018 08:08
Author: Chen Jianguang
source: Macro Research of Dr. Shen Jianguang, WeChat Public Number
edit:Oriental Wealth Network

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The United States has also opened up a new battlefield in the high-tech field. What do you mean? How should China respond? Has there been a turning point in Sino-U.S. relations?

On April 16th, the United States banned its domestic enterprises for seven yearsZTESell ​​components. The news, such as thunderstorms on the ground, has increased the possibility of Sino-U.S. extension of trade frictions to science and technology. Recently, the trade war between China and the United States has been ups and downs. After President Xi Jinping announced a new round of opening up measures at the Boao Forum for Asia, including opening up the financial market, improving the investment environment, focusing on intellectual property rights, and promising to increase imports, the trade between China and the US There are signs of slowing down. However, at this time, the United States has opened up a new battlefield in the high-tech field. What do you mean? How should China respond? Has there been a turning point in Sino-U.S. relations?

  Two U.S. government sanctions differ

The ban was introduced because ZTE violated an agreement reached with the U.S. government after it was found to illegally sell goods to Iran. In March 2016, the U.S. Department of Commerce decided that ZTE was suspected of violating the U.S. export control policy against Iran and proposedZTEExecute export restrictions. Afterwards, ZTE actively worked with the U.S. side to negotiate. The U.S. government announced that it temporarily suspended the sanctions against ZTE and granted ZTE a temporary export permit for three months. On March 7, 2017, ZTE finally announced a settlement with the United States. The main exchange condition was to pay up to 890 million U.S. dollars in criminal and civil penalties. At the same time, it promised to dismiss the four senior employees and impose a bonus on the other 35 persons. Or inform criticism and other disciplinary punishments.

The resignation of the Obama administration made ZTE quickly out of the shadow of the United States fine. In 2016, the share price of Zhongxing Hong Kong stocks began to rebound after plunging by a maximum of 30%, and by the time of reaching the settlement in 2017, all the declines have been recovered. After the crisis, ZTE achieved remarkable results in 2017. Its 2017 net profit increased by 294% year-on-year, and the Hong Kong stock price rose by 117% in 2017. In contrast, it is not difficult to find that the punishment imposed by the Trump administration is obviously a fuss. The reason is that although ZTE dismissed four senior employees, it did not impose disciplinary punishment on another 35 persons. This reason is astonishing. It is an excessive punishment. It is also an indication of the guilt of the crime. Once the policy is implemented, ZTE may be forced into a desperate situation with no parts to buy and no technical support.

In my opinion, the apparent contrast between the attitudes of the two governments toward Chinese companies reflects the profound changes in their relations. In any case, compared to the Trump administration, the Obama administration’s attitude towards China has become increasingly tough. However, at the time, the attitude of the ZTE Corporation to choose to put the sanctions on its own is to take into account that the overall economic and trade relations between China and the United States are mainly based on cooperation. There is me among you, and I have the choice made in your big background. Trump’s government has seized the slightest loophole and has not given a quick killer to China’s response time. It has even mercilessly jeopardized the interests of its own companies, which shows the escalation of tense economic and trade relations between the two countries.

  Looking at the United States as a double standard from the "French and Palestinian" incident?

The U.S. sanctioned sticks have repeatedly waved. In violation of US sanctions against foreign sanctions, ZTE is by no means the first to be punished. The U.S. has also severely punished its allies. It has also attracted worldwide attention and controversy in 2014. , United States to Paris, FrancebankSanctions. At the time, BNP Paribas pleaded guilty to criminal offences for allegedly using the US financial system to transfer funds from Sudan to Iran and Cuba from 2004 to 2012, and reached a settlement with the U.S. federal and state governments, agreeing to pay a fine of US$8.97 billion. . Even more unprecedented is that in 2015 Fife was banned from making U.S. dollar settlement business through New York and other U.S. subsidiaries for a period of one year.

At that time, the French government exerted every effort. The president of the French Central Bank, finance ministers, foreign ministers, and even the president personally came forward and asked the U.S. not to overly punish BNP Paribas. However, it failed to reverse the fine of 9 billion U.S. dollars. The fine not only made French banks barely make ends meet (BNP Paribas' pre-tax profit for 2013 was approximately 8.2 billion euros, or approximately 11.2 billion US dollars), and it has so far set banks in European banks to violate the US Department of the Treasury's Overseas Assets Control Office sanctions regulations. It was fined the highest record.

Comparing the "Fabba" incident with the punishment of ZTE in the Obama era in 2016, the author believes that this time the handling of the United States is obviously different. The first two are high penalties as the main sanctions. This time, the U.S. sanctions are more focused on export restrictions and technical blockades, and even very decisive. They directly hold back the throat of their operations and cause a near devastating blow to companies. Considering that ZTE is a typical representative of state-owned high-tech enterprises, in contrast, it shows more about its containment.China Hi-TechThe motives for the rise of technology companies.

  Yichi Zhiqiu: ZTE Sanction Reflects the Change in Sino-U.S. Relations

Comparing the obvious changes in the attitudes of the two governments and comparing the different companies and the clearly different sanctions before and after the same company, it is clear that the ZTE phenomenon is difficult to interpret. It reflects the escalation of tension between China and the United States. In fact, in 2015, the author noticed the obvious change in the “abnormal state” of Sino-U.S. diplomacy, and expected that along with the significant increase in China’s overall strength, the future of China and the US will not only be seen in the traditional security field, In the economic areas where the interests of China and the United States converge, the friction between the two countries will continue to rise. In the 2016 article “Difficulties in Sino-U.S. Cooperation,” the author was also not optimistic about the Sino-US BIT negotiations between the Sino-U.S. Strategic and Economic Dialogue (SED), which had high expectations at the time. Here.

However, during the Trump period, the escalation of tension between China and the United States was indeed exceeding the author’s expectations and seemed to be a key node in the relations between the two countries. In the author's view, the game between China and the United States is obviously different due to short-term, medium-term, and long-term.

That is, in the short term, trade disputes are used as an important weapon. This is Trump's pledge to honor election campaigns and seek to consolidate political resources. From a medium-term perspective, globalization has led to a gradual decline in the proportion of U.S. manufacturing and the corresponding loss of employment. China’s manufacturing has leapt to the top in the world and curbed the rise of China’s manufacturing industry. The competition between the two countries in manufacturing and technology is Trang. Pride made the United States once again a great appeal. In the long run, beyond the economic sphere, the United States may set off a comprehensive countermeasure against China, irrespective of Trump, or even whoever assumes the role of president of the United States. Tensions will rise. continue.

Judging from the current situation, the trade war has expanded to the technological warfare or a turning point in the overall upgrade of the game between the two countries. After the 2018 US National Defense Strategy Report publicly positioned China as a strategic competitor to the United States, not only in the trade field, but also in the United States, the United States slammed out technology-based enterprises, sword-pointing “Made in China 2025,” and playing Taiwan and North Korea. The overall escalation of China’s strong attitude towards China’s strong hawks, and other examples, is evidence.

  China's Correspondence

In the author's opinion, the United States has undergone profound changes in its attitude toward China, especially the selection of a relatively high-tech industry that has an advantage over the United States. It stems from the fact that it has witnessed the rapid development and potential threats to China in the past decade. We can see that in the high-tech fields such as artificial intelligence, cloud technology, and the Internet of Things, China has sprung up and it has overwhelmed the traditional science and technology powers Germany, Japan, etc. in just a few years, almost equal to the United States.

For example, in high-tech fields such as artificial intelligence, cloud technology, and the Internet of Things, China has emerged as a new force. In just a few years, it has developed its momentum over traditional technology powers Germany, Japan and the United States. For example, in the field of artificial intelligence, the analysis agency CB Insights released the artificial intelligence trend report for 2017. In 2017, the amount of financing for Chinese artificial intelligence-related companies surpassed that of the United States, ranking first in the world for the first time (Chinese enterprises accounted for 48%, exceeding 38% of the United States). In addition, in terms of popularization of high-tech achievements, China even partially surpassed the United States. According to Ipsos survey results, as of 2016, mobile payment penetration rate ranks first in the world with 77%, and the United States and Germany have a penetration rate of 48%. Japan's penetration rate is only 27%.

Therefore, the author believes that the ZTE sanctions should be given sufficient attention and seen as an early warning of major changes in Sino-U.S. relations. In terms of the incident itself, there are either: First, from the enterprise level, actively participate in good offices and communication; Second, through the merger of the enterprise level, the main business and industrial chain of ZTE will be transferred to other companies; Third, through the country Level coordination. For example, on the morning of April 17, the Chinese Ministry of Commerce has responded to the ZTE ban, saying that it is ready to take necessary measures to safeguard the legitimate rights and interests of Chinese companies. The author predicts that China may even conduct rigorous verification of U.S.-funded enterprises and punish those who violate the laws of China as a counterattack.

While recognizing the depth of the problem, strategically speaking, it is very necessary to do a good job of policy preparation. In the author's opinion, externally, due to the unpredictability of Trump's policies, it is necessary to resort to tricks or countermeasures. At the same time, in order to prevent it from being aggressive, further efforts have been made to appropriately counterattack so that peace can be promoted by war. From China’s own point of view, the more deterrence it becomes, the more important it is that high-tech development itself is crucial, and that it is more determined to promote a new round of reform and opening up, implement the strategy of rejuvenating the country through science and technology and the “Made in China 2025” strategy, encourage innovation, and protect property rights. Through the increase in the strength of domestic scientific research, the core intellectual property and technology held by foreign companies will become a true solution to their own technology.

In addition, on the one hand, the emphasis on economic and trade cooperation with the United States is a stabilizer and ballast for Sino-U.S. relations, and it responds to the reserve; on the other hand, it strengthens cooperation with high-tech countries such as Europe and Japan, and continues to strengthen marketization and internationalization. It is also a very pragmatic policy choice to strive for a broad alliance.

                (responsibility editor: DF078)

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