It looks like Washington’s sanctions against China are not having the desired effect
The US sanctions against China and its technology companies have prompted Beijing to pump huge amounts of money to support companies like Huawei and others to set up a network of chip factories, boosting output to meet the huge demand for these components.
Faced with the sanctions, China is now buying more chips and more machinery to manufacture them than ever before, as well as trying to attract Western talent to its companies. The battle is strategically extremely important, and has only just begun. The Chinese chip industry is undergoing a revival thanks to Washington’s efforts to force its trading partners not to buy Huawei products, despite the fact that the company is the absolute leader in terms of patents and development of 5G technology.
For example, by boycotting Huawei, the German public railroad operator Deutsche Bahn has to spend €400 million and adapt to sub-optimal performance. As the FT points out, the United Kingdom’s decision to stop using Huawei products will set its 5G network roll out back. Vodafone claimed as early as 2020 that excluding Huawei equipment would not only mean much higher infrastructure costs, but also a five-year delay.
The costs to US infrastructure of replacing Huawei and ZTE equipment have been estimated at…
