Welcome to what seems to be the new front line of the US-China tech war. "You know, more than
13,000 people work for SMIC. It's an amazing corporation." This is a corporate video promoting
China's Semiconductor Manufacturing International Corporation. Smiling executives and high-tech
chips being laser-cut, it looks great - but all is not well in SMIC-land, nor amongst other makers
of Chinese consumer technology. Washington is threatening to extend commercial sanctions to
firms like these, and chips are one area where China depends on overseas manufacturers, companies
like Samsung and Intel and others. Huawei, China's biggest phone and laptop maker, is most at risk it
seems; following US sanctions, it's no longer got access to Google's Android software, and with an
outright ban on western microchips from Wednesday, it's going to get a lot worse, according to Dan
Wang. He's a technology analyst at Gavekal Dragonomics, a consultancy in Beijing. - It's
not just the May restriction from the department of commerce that will kick in on 15 September,
it is also a restriction put in place on 20 August that makes pretty much every semiconductor that
uses any US technology, which means pretty much all semiconductors, out of reach for Huawei. And
so if Huawei does not have the most important components in, you know, digital technologies,
then it really has a lot of trouble actually making its smartphones, as well as its base
stations. - So anyone buying a Huawei mobile phone or Huawei laptop from next year is going
to receive an inferior product? - Many more than a million, and it's going to be a multiple billion
dollar question. And so based on the current restrictions, if the US government is enforcing
these restrictions very severely, I think Huawei will not even be able to manufacture any of its
smartphones, any of its base stations, or any of its laptops, such that consumers cannot even
find these things in stores and service operators wouldn't be able to buy these to make 5G networks.
That's Huawei's CEO Richard Yu, making a speech last month in which he acknowledged that Huawei
would no longer be able to manufacture its high-end Kirin chips due to the sanctions,
but as we've heard, this could be even worse for the company. I asked consultant Dan Wang whether
the outcome of this year's presidential election in the US, for example, maybe a victory for the
opposition Democrats, might yet offer Huawei a lifeline out of its fix. - Well it's certainly
worth noting that many US firms have been lobbying very hard for the US government to relax some
of these restrictions. Huawei claims that it bought around 19 billion US dollars-worth of
US technologies last year and so a lot of these firms, especially the semiconductor firms,
are going up to the US government and saying, well we need to maintain access to not just Huawei,
but also the Chinese market, which is for everyone either the largest market or the fastest growing
market. The US government is fairly receptive often to industry concerns, but it is also worth
noting that Huawei is treated as a uniquely bad actor, considered a national security risk by both
the Democrats and also the Republicans, so that might be a little bit, you know, there will be
a lot of tensions there I think. It's also worth noting that, yes, Huawei is indeed very big and it
is indeed technologically very sophisticated, but the US government has demonstrated extraordinary
will to expand extra territoriality to place pretty much every semiconductor technology
under its jurisdiction, to say, you know, we don't really want these things going to Huawei,
which we consider to be a bad actor. - Well as mentioned, the context of this crisis for Huawei
is the presidential election in America. Were Joe Biden to win the White House,
that could perhaps signal a shift in Washington's hawkish approach towards Chinese tech firms.
Certainly, the Trump campaign would like us to think so: "A global crisis. President Trump took
action, but Joe Biden attacked Trump after the china travel ban. Xenophobia and fear
mongering..." - A TV commercial for the Trump campaign. Well whether that's fair or not,
it seems the Biden camp is equally keen to paint the president as a china-loving lightweight:
"Trump praised the Chinese 15 times in January and February, as the coronavirus spread across
the world... 'It's a tough situation, I think they're doing a very good job.'"
So who is right in all of this, or is this actually one subject on which the two campaigns
agree, pretty much? I asked Daniel Russel - he's the vice-president of the Asia Society in the US,
he's a former advisor on East-Asian affairs in the Obama White House, and a man, unofficially, we are
told, very much with the ear of the Joe Biden campaign. - The big difference is that Trump is
a child of privilege. His orientation is to gripe and complain about China's unfairness and to blame
others. He's an isolationist and that's what his 'America First' is all about. It's about building
walls, closing borders, purging the US of people who don't look like him. But Biden's orientation
is to out-compete the other guy. International engagement and leadership is very much in Biden's
DNA. He's a true believer in strong alliances and so I think the big differences will come in
the fidelity to international agreements and multilateral institutions, and to develop the
close partnerships with other democracies, and that the US has a role as a champion of democracy
and human rights and international law and so on. - Yeah, you see a critic will say that it was when
Joe Biden was vice-president, when you were in the administration, that the Chinese got ahead through
rampant intellectual property theft, which wasn't really challenged for many years. -
The effort to push back and safeguard US interests against Chinese intellectual
properties theft and its cyber-enabled espionage began to ramp up in the United States over the
eight years of the Obama presidency, as the attacks began to ramp up, and the
Obama administration was very successful ultimately in 2016 in compelling China to accept
and adhere to an agreement on cyber theft. Now not everything is knowable in the cyber world, but by
and large we did see an improvement. It's called diplomacy. It isn't easy, it's diplomacy. And the
absence of diplomacy between the United States and China, certainly in the last three years,
has made the problems worse. - You're saying that China's behaviour has deteriorated as a result
of the trade wars and the America First policy? - There's no question about that, and it should not
come entirely as a surprise that if the US government labels China as an enemy,
treats China as an enemy, then gradually, over time, we will find that in China we have an
enemy. - Do you think that compromise is possible over the status of Hong Kong right now? Do you
think compromise is possible over the status of the Uighurs in Xinjiang? I mean, China's militancy
seems as austere as one could imagine almost. - It is a lot easier to create a problem than
it is to solve a problem, and problems that have been neglected or mishandled tend to get worse.
And that is certainly the case both in Hong Kong and in Xinjiang, but this is where we are, and we
need an administration that is going to adopt and pursue an integrated multilateral and sensible
policy to try to improve where we can. - The former Obama White House official Daniel Russel.
Well for a perspective from the Trump campaign, we did approach the commerce department, which has
been leading negotiations with China during the trade war, nobody was available for comment from
them, but the administration does point critically to numerous Biden statements in the past,
in which he has spoken approvingly of Beijing as a diplomatic and trading partner. It can also point,
you might argue, to those semiconductor sanctions and perhaps the reported sale of US
TikTok to Oracle - signs that its 'get tough' policy is perhaps bearing fruit. Anyway,
what does China think about all of this? Who would it prefer to see win the White House?
I asked Rui Zhong. She is a China-focused expert based at the Wilson Center in Washington DC. - I
don't think that China's priorities in terms of its own development trajectory would differ
between Trump and Biden. Since 2016, it's been really focused on funding indigenous innovation,
technical development, and tech incubators, and it's really been trying to build a status as
a risen power versus a rising power. China has really been about putting Xi Jinping thought in
a place of permanence, and solidifying his power base very, very rapidly. - Yeah, I mean Xi Jinping
thought, what that means is a far more muscular nationalist profile on the world stage, a more
aggressive stance to those who defied Chinese policy? - I would say that, yeah, for China,
internal stability and the political survival of the Chinese Communist Party, that is the core
goal. - Do you think that the US and China, then, feed off each other, that there are enemies that
need to exist for each other, they each... a bit like perhaps at the height of the Cold War,
the US and the Soviet Union were bogeymen and opponents, that this is now the same,
and that the Chinese leadership depends on the rabble-rousing effect of anti-US sentiment? Well
the difference between US-China dynamics and US-Soviet Union dynamics is globalisation;
you cannot really functionally put globalisation back in the box. A lot of firms, in looking at the
trade war between China and the US, have really tried to sketch out the reliance on Chinese supply
chains on labour, so I think that the dynamics are not one that would be impacted a lot by the 2020
election. - Rui Zhong of the Wilson Center in Washington DC. There is much of course that can
yet change on all of this before 3 November. The fallout over Huawei could intensify, there is
ongoing regional tension with India and Australia to consider, but will any of this change the
election itself? Do voters in America really care about China, amidst all the economic and
public health turmoil that's going on at home? I asked the seasoned political scientist Ian
Bremmer of the Eurasia group. It's probably a little bit less important today than it was,
say, a month ago in terms of the electoral campaign, simply because the news cycle only has
room for so much screaming, and every day there is a new thing to scream about, right? Whether it's
the Woodward book, or 200,000 coronavirus deaths, there's just a lot, right? And so I would argue
that China is critical. It's something that comes up in pretty much every speech that Trump gives,
but it's not what's dominating the news in the US as we think about the election right now. - Yeah.
I would have thought that for most elections in US history, foreign policy is something that doesn't
swing many voters? - Well nothing is swinging many voters right now, they have decided they
are polarised, and they really dislike the other side, right? In the case of China specifically,
I think there are two reasons it really matters. The first is, it's an external enemy:
"They're responsible for coronavirus, they're the ones that covered it up, they're ripping us off,
and that's why the economy is not doing as well..." And by the way, it's also important that
Biden and Trump are both trying to out-do each other in terms of how effectively hard-line they
would be on china. I mean this is the one issue out there that you have broad agreement on across
the political spectrum in the United States right now. - In terms of this geopolitical struggle, in
terms of the technological cold war as people are talking about it now, does it make any difference
who wins this election? - Sure, of course it does. If there is an accident between the United States
and China, it's much less likely to escalate unintentionally if Biden is president. Right now,
the only regular high-level conversations that are happening between the world's two
largest economies is between the US trade rep Lighthizer and Liu He, his opposite number. We
don't have high-level diplomatic engagement. I think that if Biden were to win, even though the
general orientation of policy on all of these issues, South China Sea, Hong Kong, Taiwan,
Uighurs, tech, trade, they're pretty similar, but you would suddenly have a constellation of
regular high-level engagement between the United States bureaucracy and the Chinese bureaucracy,
and that's meaningful, even if it doesn't change the policy itself. The second point is that US
policy would at least attempt to become more co-ordinated on China with other countries. - Who
does Xi Jinping want to see win this election? - That's a really interesting question. I believe
that Xi Jinping has a slight preference for Trump and those that support Xi Jinping's policies,
because let's keep in mind, under Xi Jinping, there has been enormous consolidation of control,
the anti-corruption campaign, Belt and Road, Asia Infrastructure Investment Bank,
running the world in artificial intelligence, Hong Kong national security law, I mean this stuff is
all being driven by Xi, not to mention end-of-term limits for the Chinese president, and I think that
even though Xi Jinping understands that his relationship with Trump is not good,
Trump alienates so many other leaders around the world, that that creates more space for the
Chinese to play. I think he sees an opportunity there, but I think that there are a lot of people
among Chinese political elites that think that Xi Jinping is entirely too risk acceptant,
is willing to be much more of a nationalist, much more aggressive than they're comfortable with,
and the wolf-warrior diplomacy that many talk about around Xi Jinping that sees
Trump's mistakes in international diplomacy as opportunity, I'm not sure that there's
broad agreement on that. - Ian Bremmer, president of the Eurasia group in the US.