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THE WAR THAT COMES WITH TECHNOLOGICAL LEADERSHIP

According to experts in the field, China and the United States are in a competition to lead the world of technology, which has caused tensions between the two countries. On December 1, 2018, Meng Wanzhou, Huawei’s financial director and daughter of the founder of Huawei, was arrested in Vancouver, Canada for alleged violation of US sanctions against Iran.
Huawei, is the most important Chinese company in the manufacture of components for the development of fifth generation or 5G mobile networks. It is expected that this technology (5G) creates a new ecosystem of the Internet of Things, satisfying the communication needs of billions of devices connected to the network. We have found reasons to think that Iran is simply a pretext for the United States to stop the development of this technological giant. It must be taken into account that EE. UU has used commercial and financial penalties for political purposes.
This shows that China’s technological aspirations have raised concerns in the United States. UU In this regard, President Donald Trump has said that the trade war with China will protect US dominance and curb Beijing’s plans to achieve economic and technological supremacy – according to the New York Times.
On the other hand, in 2015, China approved a strategic plan known as “Made in China 2025”, an initiative that seeks the development of ten key sectors of high technology to modernize its manufacturing base, for example, in aeronautics and robotic. One of the main objectives is that, by 2025, Beijing will be 70% self-sufficient in these high-tech sectors. Added to this, Jun Canrong, associate dean of the International Study School of Renmin University in Beijing, said that “Even if the US it tries to block China’s development, it will not succeed, since China’s huge domestic market alone is enough to drive a mature industry of AI (Artificial Intelligence). ”
“Made in China 2025” has already given something to talk about. In the midst of the aeronautical crisis generated by the plane crashes of the Boeing 737 Max, which forced them to remain on land and contemplate the possible cancellation of more than 5,000 units, China announced to international markets the arrival of a plane that will compete with it. , the C919 of the COMAC company, which has a capacity between 168 and 190 passengers. This aircraft will represent an alternative to Boeing aircraft and a new competitor in the aeronautical market dominated by Airbus and Boeing.
So far, 815 COMAC C919 units have been requested. Those who have shown interest in this aircraft are, mainly, local companies and small companies from countries with great dependence on China. The COMAC C919 costs almost half the price of its competitors, but still needs to improve its energy efficiency, which puts it at a slight disadvantage.
It is worth mentioning that China is the main Boeing market, with 25% of the aircraft of this US company. Boeing even has a manufacturing plant in China, and has strategic alliances with Chinese companies that supply their components. Thus, a new Chinese competitor in the sector can bring as a consequence readjustments in the Asian aeronautical market. Boeing will be forced to adapt to these changes. However, derived from the crisis generated by the accidents of two 737 Max, Boeing is in a very delicate situation to commit to the development of new aircraft.
This situation benefits China to impose reciprocal measures against the United States for the Huawei case. China was the first country to order its airlines to suspend flights of the Boeing 737 Max aircraft. In addition, negotiations are currently underway to reach a trade agreement between China and the United States. One of the points in discussion is the export of Boeing 737 Max aircraft to the Asian country. Thus, it remains in China, given the crisis caused by these planes, how to continue with the talks, and what position to take to be benefited.
Without a doubt, China has given much to talk about. On the one hand, the Huawei case exposes the concerns of the US government. UU for the Chinese rise in technology, which could take away their leadership. On the other hand, China has been clear in its intentions to lead the world technology sector and the arrival of COMAC C919 brings it closer to its goal.

Do you know how this battle for technological leadership can impact your business? Write to info@riesgospoliticos.com.mx to provide you with the advice you need.

 

 

Photo by Lachlan Gowen on Unsplash

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