Banning ZTE Will Also Hurt American Companies

Published in Huanqiu
(China) on 19 April 2018
by (link to originallink to original)
Translated from by Yuzhi Yang. Edited by Helaine Schweitzer.
The U.S. government’s announcement that it will ban American firms from selling parts and software to ZTE Corporation* will obviously cause huge losses for ZTE, but unfortunately, the rhythm of globalization will mean that Americans will not win here. Instead, the U.S. will suffer related losses. The American stock market has already provided a quick assessment of this decision, and the worldwide media have also figured out that the cost to America will not be minimal.

Qualcomm is ZTE’s largest supplier, and according to a Reuters analysis, Qualcomm will be threatened three ways because of the ZTE ban: Qualcomm will lose an important client; it will be replaced by a competitor; and it will be affected by Chinese retaliation toward America.

Other media outlets have estimated that if the seven-year ban is completely implemented, just the three American suppliers alone, Qualcomm, Acacia and Oclaro, Inc., would lose $6.8 billion in sales, and 32,000 employees will be affected. This pessimistic outlook caused Acacia’s stock to drop 36 percent on Monday and affected Intel and Microsoft business as well.

China is the No. 1 market for the American microchip, and the enormous Chinese market has provided American semiconductor technology companies with enormous income as well as the endless funds to sustain research and development. Losing the Chinese market could prove to be the turning point for these American companies, forcing a downturn and creating a very real risk that they will be overtaken by competitors.

America will also suffer a loss in that there will be severe doubts about its operating environment. If a company with 80,000 employees can become controversial because it does not reduce the bonuses of a few dozen employees, and the American government interferes by forcing it to cancel its contact with American companies, such an operating environment still be trustworthy? Can America bully whomever it wants? Working with American companies is not simply business anymore. Companies have to get the political correctness stamp of approval from the U.S. government.

Some Westerners have complained that there is risk in doing business in China. However, have any Western companies been banned in China like ZTE has been banned in America? Has any multinational company ever been attacked like this? The ZTE incident should be called the “35 people bonus incident,” if this was really the trigger for the breakdown in China-U.S. collaboration and globalization. It would be quite a tale.**

China will retaliate and that will accelerate the loss to American companies, focusing on where China holds the advantage. Washington shouldn’t even think about whether China will tolerate any deliberate harm of Chinese business interests by America.

The mutual attacks by China and the U.S. will lead to a disorganized trade relationship. The investment in China by American companies is far larger than Chinese business investment in the U.S., and it would be hard to avoid the fallout. Americans will suffer greater loss than the Chinese.

Most importantly, the Chinese will no longer believe that American companies are reliable partners in high-tech collaboration. The “35 People Bonus Incident” is acting as a powerful trigger for the entire country of China, which is determined to develop its own semiconductor business, and to reach the goal of replacing America in making all key electronic parts.

The high-tech business war between China and the U.S. will make things hard for China in the short run, but it will be unlucky for America in the long run, because China does have the research and development power. China was slower in developing microchip research and development before, primarily because it was easy to buy cheap American microchips, which reduced China’s own drive in developing them domestically. The microchip and its operating system is not impossible to decipher, it just needs a huge market, and the Chinese market, which imports $200 billion in American microchips annually, is certainly enough support.

Washington cannot control the outcome of banning ZTE. The China-U.S. economy is a Siamese twin, so any fracture would mean pain for both sides. Washington views this ban as a one-sided punishment for Chinese high-tech companies, which is a naive idea, and this naivete will lead to more and more American companies and businesses footing the bill.

*Editor’s note: ZTE Corporation is a Chinese multinational telecommunications equipment and systems company headquartered in Shenzhen, Guangdong. ZTE operates in carrier networks, terminals and telecommunication.

**Editor’s note: ZTE pleaded guilty last year to conspiring to violate U.S. sanctions by allegedly shipping U.S. goods to Iran. As part of the plea agreement, ZTE promised to dismiss four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them. The Chinese company admitted in March that it had not disciplined or reduced bonuses to the 35 employees.


美国政府下令对中国的中兴通讯全面禁售,自然会给中兴造成巨大损失。然而不幸的是,全球化时代的规律就是美方不会因此“胜利”,而会受到严重的连带损失。关于这一点,美国股市迅速给出了判断,全球媒体也即时算出了美方将付出的代价,它们的确不是一点点。

  高通是中兴手机芯片的最大供应商,路透社的一则分析说,高通将因中兴遭制裁受到三重威胁:失去一家重要客户,对手因此成为替代厂商而受益,因中国报复美国而受牵连。

另据媒体测算,如果对中兴的7年制裁完全实施,仅高通、Acacia通讯、Oclaro Inc三家美国供应商就将损失68亿美元的销售,超过3.2万名员工受波及。正因这一悲观预测,Acacia通讯的股票本周一暴跌35.97%。此外英特尔和微软的业务也将受到影响。

  中国是美国芯片的第一大销售市场,中国市场为美国半导体科技公司提供的巨大收入使得它们有充足资金不断投向新的研发。失去中国市场同样可能成为那些美国公司前途的拐点,使它们走上风光渐失的下坡路,被对手超越的风险十分真实。
 
 美国还将遭遇营商环境受严重质疑的损失。一个8万人大公司因为是否扣罚了几十名员工的奖金存在争议,就被美国政府横加干预,强行停止它与美国公司的合同。这样的美国营商环境还可信吗?美国岂不是想整谁就整谁?与美国公司合作哪里是简单地做生意,它要不停由美国政府盖上政治正确的戳。

  一些西方人批评在中国做生意有风险,但是它们哪一家公司在中国有过中兴被美国政府如此制裁的遭遇?在这个世界上,又有哪一家跨国公司被这样打击过?中兴事件应当起个名叫“35人奖金危机”,如果它就是掀翻中美合作、甚至令全球化受重挫的真正导火索,那可真要成为历史上大事件中最离奇的段子了。

  中国肯定要反击,加重美国企业的损失,而且会从中国最擅长的角度入手。美方肆意损害中国企业利益的行为会得到中方的容忍,华盛顿连想都不要想。

  中美相互打击会导致中美经贸关系的混乱,美国公司在中国的投资远远大于中国公司在美国的投资,这些投资受到殃及很难避免,而这当中美方的损失也自然会大于中方的损失。

  最重要的是,中国社会将从此不再相信与美国公司在高科技产业合作的可靠性。“35人奖金危机”必将强烈刺激整个中国,促使这个国家下决心全面发展半导体产业,确立最终替代美国产所有关键元器件的目标。

  中美高科技开战,短期内中国困难,长期看美国倒霉。因为中国已经具备了研发能力,中国过去研制芯片迟缓,最大原因是购买美国廉价芯片很容易,大大削弱了我们壮大国产芯片的市场动力。芯片和操作系统都非高不可及,它们最需要的是庞大市场支持,而中国每年进口2000亿美元芯片的市场能够提供足够的支持力。

  制裁中兴所导致的后果决不是华盛顿所能控制得了的,中美经济已如“连体婴儿”,撕开的过程必将意味着双方的痛苦。华盛顿把它想象成对中国高科技公司的单方面惩罚,这种想法太幼稚了,它的幼稚将会由越来越多的美国公司和产业出钱埋单。
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