The trade war between China and the US is at its peak. The decision to cut off Chinese brand Huawei recently taken by the Trump administration has not gone down well with China and they are ready to hit back. Huawei ban! The decision taken by the US government claiming Huawei to be a Chinese Spy posing threat to national security of the country has been found to have no real basis or proof actually.
Huawei, which is one of the biggest tech brands of the world offering world class innovations, works around with a lot of American companies be it Google for the Android OS support or Qualcomm for the mobile chipsets and a decision like this could actually shake the company’s business strategy . It is believed that the move is nothing but a politically inclined decision. Due to this decision, Huawei which shipped about 200 million smartphones worldwide last year beating even Apple figures is caught between the trade war of the two countries.
How could China not retaliate in such a scenario?
So, in a recent meeting convened by the Chinese government, Tech giants like Microsoft and Dell from US and even Samsung of South Korea were called. The meeting was conducted to warn these high profile companies of the dire consequences if they supported Trump’s decision to ban the sale of American technology to China.
Other companies who comply with the move were also warned of the strong consequences. The Chinese official also cautioned companies of strong ramifications if they decided to pull production from China fearing long term risks. In fact, the Chinese govt. suggested that these companies should rather lobby against such US policies. The other non US companies were however safe if they maintained business as normal, they suggested.
Companies like Facebook and Google’s decision to cut Huawei off these social networking apps to comply with the US cut-off has been giving jitters to the Chinese government and such a move was expected before others could follow suit. Such a move taken by the US government is to dampen the technology rise in China – that’s how the action is perceived to be in the country.
Though US took a strong step that could hamper China’s long term technology plan but a 90 day breather is an indicator that this is just a political jolt and just a way to show the super strength of the world’s biggest economy. They know that taking such a strong action against China could affect their economy as well if China decides to ban the sale of US products and the war can really get brutal. Another important outcome of this standoff could be China’s withdrawal of rare earth mineral’s support as they account for about 70% of the total resources worldwide. This could lead to shortage of these minerals which are used in high tech devices, batteries and automotive industry amongst others.
So, in all probability, things have to get sorted as the clash of the two titans would result in the loss of the world economy as well as the economies of the respective nation.