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This is different from Korean manufacturers this time. This is China caught in a national security issue. - China has a huge domestic market and it may be suff

This is different from Korean manufacturers this time. This is China caught in a national security issue. - China has a huge domestic market and it may be sufficient in itself for a profitable venture - About half of Android phones are manufactured by Chinese brands. - China has deep pockets and are willing to play the long game. - They have no choice. Trump's used the nuclear option, which may well work in the short term but in the long term this has shown China and others that they have to get rid of their reliance on US tech and companies as a matter of national security. I think Trump's move has set a ball rolling and that in 10 years we'll see the results of that... And that won't be a pretty picture for the US.

fspeech 7y ago
I think Google can compete on its own merit without having to be viewed as a monopolist, so I disagree that it won't be pretty for the US. Google will do fine on a more level playing field.
- NotPaidToPost 7y ago
  The problem is not Google per se, but the power the US government yields through Google and tech companies in general. If 50% of Android phones are by Chinese brands then once an alternative exists they will have a big incentive in dropping Android. The end result can only be a massive market share loss for Google. The same goes for other tech companies like Qualcomm, ARM (not US but in same boat). Anything that can be weaponised. This is geopolitics and a global strategic issue. Google is just caught in it.
- DEADBEEFC0FFEE 7y ago
  I think the post you replied to may not be referring to Google, but to all the other companies that will have a choice to build for a future Asian giant or US giant (Google). Knowing that they can be cut off by US Gov, may push investment east.
oblio 7y ago
I don't get why you're being downvoted. China just needs a Deng Xiaoping moment for software. If they try top-down control, even with all the Chinese brands behind it, it will still founder behind Android. But if they relinquish some control for the sake of getting a competitive OS where they can't be cut off, what you're saying is true. I do see them capable making an OS, technically, I'm more worried about their worldwide soft skills/soft power. Which I'm guessing they'd also want to improve, so you never know.
- lightedman 7y ago
  "I don't get why you're being downvoted." Because this is HN and HN has a horrible moderation system that makes no sense and pales in comparison to the BBS of olde.
Silhouette 7y ago
Trump's used the nuclear option, which may well work in the short term but in the long term this has shown China and others that they have to get rid of their reliance on US tech and companies as a matter of national security. Indeed. Trump's heavy-handed approach in recent weeks seems likely to have far-reaching implications, and presumably the results won't be favourable for Western businesses hoping to expand more into fast-growing Asian markets in the years ahead. He's shown that any business with strong connections to the US can't be relied upon to be an economically rational trading partner, because the US is now demonstrably willing to conflate national security issues with trade policy. That policy is also putting US allies in awkward positions. Here in the UK, we are faced with questionable demands from a long-time ally (the US) and thinly veiled threats from a big investor (China) if we comply with those demands. Presumably other allies such as Australia feel similar opposing pressures. The only rational long-term strategy I can see for nations in this position is to be clear that they will always make their own strategic decisions on security matters and which global suppliers to use for national infrastructure projects (and then to actually do so, throwing a proverbial elbow at the US if necessary). At least that way you maintain some credibility with future governments around the world as a reasonable partner. In the meantime, it seems that the current hostile stance toward China from the Trump administration in the US is hurting the global economy, and ironically it also seems like US consumers are the ones ultimately paying most of the cost of those trade barriers.
- HillaryBriss 7y ago
  > ironically it also seems like US consumers are the ones ultimately paying most of the cost of those trade barriers Consumers will pay more but I'm not as sure about the irony. Couldn't it be that the intent is to reduce US consumption of Chinese imported goods? Couldn't the policy's intent simply be to shift the economy ever so slightly away from consumption and toward production?
  - Silhouette 7y ago
    Couldn't the policy's intent simply be to shift the economy ever so slightly away from consumption and toward production? It certainly could be, but I think how credible that is depends on the goods affected. If they are essentials and there is competition from elsewhere, the barriers make China less competitive, and US customers will presumably go for the best deal to minimise their losses. If they are non-essentials, the barriers also make them less attractive, and again China loses out. But if they are essentials and China is the only game in town, import tariffs look a lot like a tax on the US market.
dageshi 7y ago
This was always China's desire, to basically build home grown tech's that could replace the ones they were using from the west. Unless the Chinese government mandates use of a single os (no android) in the domestic market then it won't work, if they do then they still don't have a viable os for the rest of the world because the rest of the world wants google, facebook and other apps which are banned in china. Facebook e.t.c. aren't going to make apps for a primarily domestic only phone where they are legally banned.
- NotPaidToPost 7y ago
  Chinese brands have huge market share in many countries outside China (e.g. close to 50% in India). Facebook and others will make apps for them...
  - geomark 7y ago
    Chinese brands also have about 50% of the market in Thailand, followed by Samsung and then Apple. Not as big as India, but annual sales of around 20 million units is still a decent chunk of change.
- AnonymousPlanet 7y ago
  China is shifting its factories to Africa, eventually growing a market there. It won't matter what apps irrelevant markets like North America or Europe want while the rest is using Chinese services.
  - PuffinBlue 7y ago
    That's interesting. Do you have any more info on where they are putting those factories?
    - Symmetry 7y ago
      Everywhere from Nigeria to Lesotho basically. https://www.goodreads.com/book/show/35288650-the-next-factory-of-the-world https://www.goodreads.com/book/show/35288650-the-next-factor...
Tsubasachan 7y ago
Is it about security? Because Trump is saying he wants to have a deal with Huawei now... Or is it about the trade deficit? In which case Korean and Japanese manufacturers are not safe from prosecution.
- NotPaidToPost 7y ago
  It is certainly a national security issue for China (and the world) to see that the US Government is able to 'flip the switch' on so many critical tech so easily.
  - lmm 7y ago
    Sure. But for South Korea and Japan it's less so; those nations already take a national security posture that leaves them exposed if the US were to turn against them.
    - max_wen 7y ago
      South Korea and Japan have been allies of the US for quite a long time and have zero reason to think that would ever change.
      - lmm 7y ago
        Exactly - so "the US could flip a switch and sabotage our technology" may not be a particular concern for them.
      - axway 7y ago
        There are lots of reason for a company or a country to have alternative independent supply chain (hardware or software or tech or anything). Japan has to sign the Plaza Accord https://en.wikipedia.org/wiki/Plaza_Accord#Effects https://en.wikipedia.org/wiki/Plaza_Accord#Effects when it positioned to challenge US economy. It is attributed as the main reason to their Lost Decades. You bet that Japanese forgot about this, and Korean and Chinese do not know this. What US gov initially wanted probably is something like Plaza Accord with Chinese, but they have the size to resist, so Trump showed the nuclear option. Like some commenters pointed out here, it may work in short term, but it will hurt US companies in long term.

fspeech 7y ago

I think Google can compete on its own merit without having to be viewed as a monopolist, so I disagree that it won't be pretty for the US. Google will do fine on a more level playing field.

NotPaidToPost 7y ago
The problem is not Google per se, but the power the US government yields through Google and tech companies in general. If 50% of Android phones are by Chinese brands then once an alternative exists they will have a big incentive in dropping Android. The end result can only be a massive market share loss for Google. The same goes for other tech companies like Qualcomm, ARM (not US but in same boat). Anything that can be weaponised. This is geopolitics and a global strategic issue. Google is just caught in it.
DEADBEEFC0FFEE 7y ago
I think the post you replied to may not be referring to Google, but to all the other companies that will have a choice to build for a future Asian giant or US giant (Google). Knowing that they can be cut off by US Gov, may push investment east.

oblio 7y ago

I don't get why you're being downvoted. China just needs a Deng Xiaoping moment for software. If they try top-down control, even with all the Chinese brands behind it, it will still founder behind Android. But if they relinquish some control for the sake of getting a competitive OS where they can't be cut off, what you're saying is true. I do see them capable making an OS, technically, I'm more worried about their worldwide soft skills/soft power. Which I'm guessing they'd also want to improve, so you never know.

lightedman 7y ago
"I don't get why you're being downvoted." Because this is HN and HN has a horrible moderation system that makes no sense and pales in comparison to the BBS of olde.

Silhouette 7y ago

Trump's used the nuclear option, which may well work in the short term but in the long term this has shown China and others that they have to get rid of their reliance on US tech and companies as a matter of national security. Indeed. Trump's heavy-handed approach in recent weeks seems likely to have far-reaching implications, and presumably the results won't be favourable for Western businesses hoping to expand more into fast-growing Asian markets in the years ahead. He's shown that any business with strong connections to the US can't be relied upon to be an economically rational trading partner, because the US is now demonstrably willing to conflate national security issues with trade policy. That policy is also putting US allies in awkward positions. Here in the UK, we are faced with questionable demands from a long-time ally (the US) and thinly veiled threats from a big investor (China) if we comply with those demands. Presumably other allies such as Australia feel similar opposing pressures. The only rational long-term strategy I can see for nations in this position is to be clear that they will always make their own strategic decisions on security matters and which global suppliers to use for national infrastructure projects (and then to actually do so, throwing a proverbial elbow at the US if necessary). At least that way you maintain some credibility with future governments around the world as a reasonable partner. In the meantime, it seems that the current hostile stance toward China from the Trump administration in the US is hurting the global economy, and ironically it also seems like US consumers are the ones ultimately paying most of the cost of those trade barriers.

HillaryBriss 7y ago
> ironically it also seems like US consumers are the ones ultimately paying most of the cost of those trade barriers Consumers will pay more but I'm not as sure about the irony. Couldn't it be that the intent is to reduce US consumption of Chinese imported goods? Couldn't the policy's intent simply be to shift the economy ever so slightly away from consumption and toward production?
- Silhouette 7y ago
  Couldn't the policy's intent simply be to shift the economy ever so slightly away from consumption and toward production? It certainly could be, but I think how credible that is depends on the goods affected. If they are essentials and there is competition from elsewhere, the barriers make China less competitive, and US customers will presumably go for the best deal to minimise their losses. If they are non-essentials, the barriers also make them less attractive, and again China loses out. But if they are essentials and China is the only game in town, import tariffs look a lot like a tax on the US market.

dageshi 7y ago

This was always China's desire, to basically build home grown tech's that could replace the ones they were using from the west. Unless the Chinese government mandates use of a single os (no android) in the domestic market then it won't work, if they do then they still don't have a viable os for the rest of the world because the rest of the world wants google, facebook and other apps which are banned in china. Facebook e.t.c. aren't going to make apps for a primarily domestic only phone where they are legally banned.

NotPaidToPost 7y ago
Chinese brands have huge market share in many countries outside China (e.g. close to 50% in India). Facebook and others will make apps for them...
- geomark 7y ago
  Chinese brands also have about 50% of the market in Thailand, followed by Samsung and then Apple. Not as big as India, but annual sales of around 20 million units is still a decent chunk of change.
AnonymousPlanet 7y ago
China is shifting its factories to Africa, eventually growing a market there. It won't matter what apps irrelevant markets like North America or Europe want while the rest is using Chinese services.
- PuffinBlue 7y ago
  That's interesting. Do you have any more info on where they are putting those factories?
  - Symmetry 7y ago
    Everywhere from Nigeria to Lesotho basically. https://www.goodreads.com/book/show/35288650-the-next-factory-of-the-world https://www.goodreads.com/book/show/35288650-the-next-factor...

Tsubasachan 7y ago

Is it about security? Because Trump is saying he wants to have a deal with Huawei now... Or is it about the trade deficit? In which case Korean and Japanese manufacturers are not safe from prosecution.

NotPaidToPost 7y ago
It is certainly a national security issue for China (and the world) to see that the US Government is able to 'flip the switch' on so many critical tech so easily.
- lmm 7y ago
  Sure. But for South Korea and Japan it's less so; those nations already take a national security posture that leaves them exposed if the US were to turn against them.
  - max_wen 7y ago
    South Korea and Japan have been allies of the US for quite a long time and have zero reason to think that would ever change.
    - lmm 7y ago
      Exactly - so "the US could flip a switch and sabotage our technology" may not be a particular concern for them.
    - axway 7y ago
      There are lots of reason for a company or a country to have alternative independent supply chain (hardware or software or tech or anything). Japan has to sign the Plaza Accord https://en.wikipedia.org/wiki/Plaza_Accord#Effects https://en.wikipedia.org/wiki/Plaza_Accord#Effects when it positioned to challenge US economy. It is attributed as the main reason to their Lost Decades. You bet that Japanese forgot about this, and Korean and Chinese do not know this. What US gov initially wanted probably is something like Plaza Accord with Chinese, but they have the size to resist, so Trump showed the nuclear option. Like some commenters pointed out here, it may work in short term, but it will hurt US companies in long term.