Epic fight between the United States and China for the control of technology

An epic fight between the United States and China to control the technologies that will dominate our future is taking place – and investors are caught between two fires.

The G20 summit will begin this weekend in Argentina, in a context characterized by technological tensions between the two superpowers in the world.

US President Donald Trump has threatened this week to impose tariffs on a range of technology imports from China, including iPhones and laptops. At the same time, a key US government agency has proposed limiting exports of a range of emerging advanced technologies that could be critical to the country's national security.

Tensions seem to be about trade, but analysts say they are much more than that. The Chinese technology sector is perceived as a strategic threat to the United States. It is also thought in Washington that the country has embarked on industrial espionage against American corporations.

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"China aspires to become a" scientific and technological superpower "and policymakers in Washington are realizing the inherent strategic challenge," said Fergus Ryan, an analyst at the Australian Strategic Policy Institute, an expert on cybersecurity.

New Zealand is in line with Australia, with the assessment of Huawei's safety by the GCSB.


New Zealand is in line with Australia, with the assessment of Huawei's safety by the GCSB.

(These espionage concerns are not limited to the US This week, New Zealand's chief intelligence agency has banned Chinese equipment supplier Huawei from providing 39, equipment for a 5G mobile network network planned in the country for reasons of national security, in accordance with Australia, which took a similar measure at the beginning of the year.New Zealand and Australia are members intelligence alliance "Five Eyes" with the United States, the United Kingdom and Canada.)

If the US decided to limit exports of certain technologies to China, they could have a leverage effect. Although China is a major technology maker and is moving up the value chain, it still relies on high-tech components from the United States, such as semiconductors or computer chips, analysts said. Citi.

Yet until now, the biggest victim of the hardening of the Trump government's position on trade with China has undoubtedly been America.

Last month, Apple's shares fell 20% and lost 200 billion US dollars ($ 292 billion New Zealand) in market value.

The biggest casualty of the Trump administration position on trade with China has been America, including companies like Apple.


The biggest casualty of the Trump administration position on trade with China has been America, including companies like Apple.

Most of Apple's products are assembled in China, which also represents a huge market for the company, accounting for about 20% of its sales.

"The sentiment among technology investors is as negative as we have seen for many years," wrote Daniel Ives, an analyst at Wedbush Securities. "This has been a perfect storm for Apple … concerns about XS / XR's iPhone demand data, particularly from China, are clearly worrying."

Most US companies in the megacap of Apple, Internet companies refusing to submit to censorship, are currently excluded from China. But Google is working on a secret project back in the country, upsetting parts of its own workforce.

In the longer term, it is not just the price of stocks.

The US Office of Industry and Security has proposed to control the exports of emerging technologies such as artificial intelligence, natural language processing, robotics and quantum computing, because their loss of control could threaten the national security of the country.

These are the same types of technologies that China wants to dominate.

Such technologies "will be crucial in deciding who will have geopolitical control in the future," Ryan said.

"China recognizes and has targeted these areas and more in its initiative" Made in China 2025. "Its goal is to exceed the existing high-tech economies in the world, such as the United States, Germany , South Korea and Japan. "

President Trump is scheduled to hold a dinner with his Chinese counterpart, President Xi, in Argentina next week. It is possible that they will reach an agreement to resolve growing tensions over trade and short-term technologies.

But the long-term struggle for control of emerging technologies that can reshape the world will certainly last for years, if not decades.

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