27-01-2021 | By Robin Mitchell
China has been at the centre of many topics here, and for good reason. From industrial espionage to the development of military systems using stolen technology, the US has enacted many restrictions and bans against the country. Will the new president continue the trade war, how could different actions affect the electronics industry, and should electronic companies be concerned?
China vs. US – What caused all the fuss?
For several years, China has been repeatedly in electronics news for a wide variety of reasons from the development of new technology to the sudden growth in consumer electronics. However, the past four years have seen China also be repeatedly attacked by western nations (mainly originating from the US), as information came to light about the many darker practices going on including industrial espionage, IP theft, and cybercriminal activities.
While it was well understood that China has historically been involved in somewhat suspicious actives, it was the Trump presidency that saw major changes. From trade wars to license restrictions, President Donald Trump has brought in major action with regards to China’s business practices, currency manipulation, and the use of civilian companies to produce military tech.
Of course, China has repeatedly called out on the US government for its unfair practices and remains insistent that many accusations are unfounded. However, there is an arguably large amount of evidence that would suggest otherwise, and some of these incidences have even been covered here.
Graphics processing boards for servers used by major companies discovered a hidden chip that was inserted during manufacture in China
Patents filed by China specifically mention image detection of races and religions despite having said that it would not develop such technology
Monitoring equipment and private data uploads were discovered in the African Union Headquarters which connected to Chinese servers
Enter The New Presidency
With Donald Trump on the way out, and Joe Biden taking the centre stage, many wonder how the new president will handle China. Unfortunately, Biden has released very little information on China's policies, which means that it is difficult to understand exactly which way the new president will sway.
Before Trump, the US policy on China could be somewhat laid-back with a “status-quo” attitude; China doesn’t provoke western interests, so dodgy industrial practices can continue with little concern. During these times, Joe Biden was vice president to Barrack Obama, and unless the concerns of the Democratic party have changed since, Joe Biden could very easily revert to this policy.
However, with the COVID-19 pandemic having massively affected the world economy, securing jobs and manufacturing may become more important. China's IP theft practices mean that low-cost products can quickly flood the market and hurt US interests. Therefore, the US population may feel that the US should take a stronger stance against Beijing.
Furthermore, concerns in privacy in the IoT field are seeing customers move away from Chinese developed products. This will help strengthen US companies that can develop such technologies locally, and retaining strong action against China will ensure a more level playing field with US IoT companies. The banning of Huawei equipment in infrastructure also opens up growth and opportunities to home businesses, which increases security and provides economic growth.
How will these decisions affect the electronics industry?
Right now, it is not clear which way the new government will go with China. But, we can make some simple predictions as to what will happen either way.
If Biden decides to remain tough on China, US companies will continue to have restricted access to Chinese-developed equipment and products. While this means that the development of 5G and other next-generation technology may be hindered, it also provides the electronics industry opportunity to grow. This could see the increase in hiring of engineers from western nations including the UK and EU (remember, these nations typically follow US foreign policy).
If Biden decides to go back to the previous policy of taking a step back, the industry may see Chinese-developed products and technology flood the market. This would be good for consumers initially as lower-priced products can help get the economy moving again after COVID-19. However, many privacy concerns surround China, and many of these devices may contain backdoors and/or malware that can send private data to the Chinese government.
Furthermore, electronics companies will compete with Chinese manufacturers which could see some companies either reduce their product ranges or shut down completely. However, on good faith, China could recognise the damaging nature of IP theft and more strongly enforce international law regarding copyright and theft.
It is very hard to predict what will happen, and the new President hasn’t helped with many policies not being clearly defined. Understanding how leaders often try to appease to their voting base, Biden will more likely retain the tariffs and use them as leverage to get China to change its own policies. Taking strong action against China benefits potentially half the voting base who already feels disenfranchised and provides the opportunity to move more technological development back to the US.