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SAN FRANCISCO – The Chinese government this week convened major US and other technology companies to warn them that they could face dire consequences if they cooperated with the ban, by the Trump administration , to sell essential American technologies to Chinese companies, according to regulars of the meetings.
Held on Tuesday and Wednesday, the meetings were held shortly after Beijing announced a list of "unreliable" companies and individuals. This list was widely seen as a way to convince the Trump administration of having decided to cut sales of US technology to Chinese electronics giant Huawei. The United States has accused Huawei of stealing trade secrets and carrying out surveillance on behalf of Beijing.
Detailed information about the meetings, the last two-week move of strong economic relations between the United States and China, was shared by two people who know them well, who asked not to be named because They were not allowed to discuss it and could cope. punishment. Among the companies convened by the Chinese authorities were a number of the world's largest semiconductor companies, as well as other technology giants.
The world's most important trading relationship with corporations and governments around the world has been unleashed. Whereas the conflict had already been tough for Chinese-US. relations, Huawei's sudden ban last month surprised a lot of people, increasing the stakes by attacking China's long-term technological ambitions.
Now, each of the two superpowers seems to be making new economic weapons to target the other. What used to be a tense but deeply embedded trading relationship threatens to dissolve almost entirely, raising fears of a new geopolitical reality in which the world's two superpowers compete for economic influence and try to freeze each other's key technologies and technologies. Resources.
"It's now extremely delicate, because the Trump administration, by its polite tactics, has destabilized all of the relations, commercial and otherwise," said Scott Kennedy, senior advisor to the Center for Strategic and International Studies, based at Washington, which studies Chinese economic policy. .
This week's meetings were led by China's Central Economic Planning Agency, the National Development and Reform Commission, and representatives from its Ministry of Commerce and Ministry of Industry. and Information Technology have addressed their remarks to a wide range of exporting companies in China, according to the two people familiar with the rallies.
The involvement of three government agencies suggests a high level of coordination and likely approval at the top of China's opaque leadership structure. The intervention seemed designed to rally Huawei's support, although the company was not specifically mentioned, the two said.
"There is a strong perception in Beijing that the US government aims to mitigate the rise of technology in China and that if this process is not slowed down or halted, the future of the entire Chinese digital economy is in danger, "said Paul Triolo, director of the office. geotechnology within the Eurasia consultancy group, adding that the niche had major political implications for Xi Jinping, China's president and leader of the ruling Communist Party.
"Xi and the party will be seen as unable to defend China's economic future" if the confrontation with the United States caused Huawei significant damage and prevented China from deploying the next generation of wireless technology called 5G, added Mr. Triolo.
More generally, the warnings also seemed to be an attempt to prevent a rapid break in the sophisticated supply chains that connect the Chinese economy to the rest of the world. The production of a wide range of electronic components and chemicals, as well as the assembly of electronic products, make the country one of the pillars of the activities of many of the largest multinationals in the world.
As a result of the breakdown of US-China trade relations, China is increasingly concerned that large companies are looking to shift production elsewhere to avoid long-term risks. At this week's meetings, the Chinese authorities have explicitly warned companies that any attempt to remove from China a production that seemed to go beyond conventional diversification for security reasons could result in criminal penalties, according to the two. people.
Chinese officials seemed to have different messages for companies, depending on whether they were American or not, the people added.
In the United States, they warned that the Trump administration's decision to cut Chinese companies from US technology had disrupted the global supply chain, adding that companies that follow this policy could suffer permanent consequences. The Chinese authorities have also suggested that companies should lobby to counter the government's measures.
"The Chinese government has consistently used shocking multinationals to try to maintain them in the event of disputes between China and others that could cause these companies to reduce their activities in China," Kennedy said.
In the past, China has used the giants of American technology as a tool of diplomacy. For example, during a High-level visit to the United States in 2015, Mr. Xi's stopped in Seattle before traveling to Washington. There, he met with high-tech figures from the US and China to highlight the depth of economic ties between countries, even as the administration of President Barack Obama sought to chart a course that would thwart anti-competitive business practices and investments. from China. rules.
This time, such a piece is less likely to be effective, said Kennedy, because it forces companies to choose between bowing to pressure from Beijing and breaking US law.
"US companies are not going to break American laws, especially in such a prestigious context where their actions are controlled," he said. "Businesses are between the hammer and the anvil, but this place will win."
Chinese officials told companies outside the United States that as long as they maintain their current relations and continue to supply Chinese companies normally, they will not suffer any negative consequences. They also stressed China's willingness to open trade and protect intellectual property, according to people familiar with the meetings.
The Huawei sales ban by the Trump administration has dealt a heavy blow to semiconductor companies that supply parts used in Huawei's telecom equipment. Several American companies have reduced their quarterly earnings forecasts by tens of millions of dollars. According to the consulting firm KPMG, about 60% of sold semiconductors are connected in one way or another to China's supply chain.
Resolving the mercantilist stalemate can be difficult, said Mr. Triolo, because progress in trade negotiations are related to the progress of Huawei's technology ban, but Huawei's problem can not be addressed by official trade routes. For example, the dispute was ignited by fraud charges filed by the United States against Huawei's senior executive Meng Wanzhou, who is awaiting extradition proceedings in Canada, as well as charges of obstructing him. and others against the society itself.
A separate negotiation between senior officials over Huawei is likely the only way forward, Triolo said – or an even less likely possibility: "Huawei should send a team to Washington to admit his guilt and negotiate what could be a humiliating agreement with the US authorities. "
"So far, there is no indication that Beijing or Huawei are considering this option," he said.
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