US Treasury Secretary Steven Mnuchin met up with People’s Bank of China Governor Yi Gang during a G20 ministerial meeting in Japan last weekend.
Following the meeting, the American official referred to the dialogue as “constructive”.
Yet, that doesn’t mean that the world is finally seeing light at the end of the tunnel in relation to the Sino-US trade war.
It is because whether or not the trade dispute between Washington and Beijing can be resolved still depends overwhelmingly on how the bargaining between US President Donald Trump and Chinese President Xi Jinping is going to play out at their meeting scheduled for the end of this month.
As a matter of fact, up to this point, the US-China trade war has shown no sign of abating, and it has become increasingly clear that Beijing is determined to retaliate amid Washington’s all-out onslaught against Chinese telecommunications equipment giant Huawei.
According to state news agency Xinhua, Beijing is set to launch a mechanism for a national technological security management list to control export of “core and leading” technologies in order to prevent the cutting-edge technologies from being used by “certain countries” standing in the way of China’s development.
In the meantime, the New York Times has reported that high-ranking Beijing officials summoned major tech companies such as Microsoft, Dell, Samsung, etc to a meeting last week.
The paper claimed that during the meetings, representatives of the companies were warned that they could receive penalties if they either follow Trump’s export ban against Chinese tech firms or withdraw their production lines from China for security reasons.
At first glance, Beijing may appear to be just bluffing over its proposed export control of sensitive technologies, since the United States is still, generally speaking, in a definite lead over China when it comes to hi-tech.
Nevertheless, if you think Beijing’s claims over protecting its technological advantage are purely something to laugh at, think again.
It is because in recent years, China did witness technological and scientific advancement at a jaw-dropping pace in certain fields.
For example, in January this year, China became the first ever country to successfully land an unmanned spacecraft on the far side of the moon.
Then, last year, China unveiled the prototype of its new generation supercomputer, Tianhe-3, which is, theoretically speaking, faster than the Summit, i.e. the supercomputer currently in service under the US Department of Energy.
As we all know, under our globalized economy, there would be no winner in case of a trade war or a “Tech Cold War”.
All in all, business enterprises in the US and China, as well as the global supply chain and the economic climate in general, will suffer if a “tech iron curtain” descends upon the world.
This article appeared in the Hong Kong Economic Journal on June 10
Translation by Alan Lee
[Chinese version 中文版]
– Contact us at [email protected]