Trade war: China push to end heavy reliance on technologies from US

Fears that China is threatening US technology leadership in robots, electric cars and other advanced technologies are pushing the world’s two biggest economies toward a full-blown trade war as the two sides prepare to impose tariffs Friday on billions of dollars’ worth of each other’s products.

China remains heavily reliant on technologies from the West. Tech giant ZTE’s near-death experience after Washington barred it from buying US components was a stark reminder that China’s industry leaders cannot function without American technology.

A key Chinese weakness is in semiconductors, used in everything from smartphones to cars, according to industry analysts. Even after decades of government-backed programmes to nurture such knowhow, high costs and research challenges mean China still needs years to create its own. “I don’t think there is a lot of progress,” said Nikhil Batra, who follows the telecom equipment industry for IDC. Trade data suggest China imported as much as $26 billion worth of integrated circuits last year, according to Kenny Liew of BMI Research.
 

China has produced success stories including Huawei Technologies, the biggest global seller of switching gear for phone companies and the No 3 smartphone brand. It has developed own Kirin line of chip sets to power some of its phones, reducing reliance on US-based Qualcomm’s Snapdragon. 

Still, such successes are rare. Chinese leaders are uneasy, especially about relying on foreign technology to keep the nation’s secrets. “Independent innovation is the only way for us to ascend the world’s technological pinnacle,” President Xi Jinping had said in March. Beijing has announced a series of initiatives including “Made in China 2025,” which calls for creating Chinese global competitors in robotics, AI, biotechnology and other fields.