China's tech industry 'holds its breath' waiting for US election


Chinese tech leaders say the outlook for their industry would be much more complicated if Trump were re-elected than if Ms Harris were to win.

On November 5, the presidential election will take place in the United States. In recent polls, the support rate between Mr. Donald Trump and Ms. Kamala Harris is very close.

Chinese tech executives say Trump's unpredictable style could see the industry hit with increased sanctions, but also eased ones.

The Republican candidate initiated the US-China trade war during his 2017-2021 presidential term, when he banned high-tech exports to China. His reason was that Chinese companies competed unfairly and threatened national security.

Harris’s policies, meanwhile, are more predictable. Chinese tech leaders expect her to continue President Joe Biden’s policy of gradually tightening export controls and leveraging international alliances to slow China’s technological development.

Unpredictable outlook

Huawei's booth at the World AI Exhibition in France in February 2023. Photo: Reuters

A survey of Chinese tech business groups found that Harris’s more predictable policies were a better choice for companies. Meanwhile, more than half of analysts said that in the short term, Trump’s victory would be negative. He is likely to increase export controls and impose more sanctions on China’s semiconductor industry. During his tenure, Trump has imposed billions of dollars in tariffs on Chinese tech goods and punished Chinese tech giants like chipmaker SMIC and telecoms giant Huawei.

"Trump has upgraded the process of comprehensively curbing the development of China's science and technology. If he comes to power again, the domestic semiconductor industry may come under further pressure," said Shanghai-based brokerage Topsperity Securities.

However, the Material Energy Times said that "Trump's unilateral policies could also face opposition and lack of cooperation from the international community". In contrast, the policies that Harris will inherit from President Biden "are long-term, coordinated and predictable".

Trump’s unpredictability is evident in his statements and social media posts. During the campaign, he showed a willingness to reverse measures he had taken against Huawei and ZTE while in office. Trump also opposed a proposed ban on the short-video app TikTok .

In July, a post on EETop, an information platform and forum for Chinese electronics companies, said that Trump’s criticism of US trade relations with allies such as Europe, Japan, and South Korea could harm bilateral cooperation. These countries have business interests in China. “This means that in the global semiconductor industry, unilateral measures by the US are ineffective,” the post said.

“Therefore, Europe and the Netherlands may facilitate China’s ability to circumvent restrictions on importing EUV lithography machines,” EETop said. China currently relies on foreign EUV lithography machines, but is being denied access to the most powerful ones.

Self-sufficient

Regardless of who wins, analysts say China’s tech industry will focus on the domestic market and become more independent than it was under Trump and Biden. China has retaliated when the US started a trade war, such as restricting rare earth exports . But the trade war has also prompted the country’s tech industry to seek ways to protect itself from sanctions.

In 2016, China had four government procurement projects worth more than 10 billion yuan ($1.4 billion) to replace foreign hardware and software with domestic products, Reuters reported. This year, the country has 169 such projects, including 75 projects that require more than 50 billion yuan in budget.

So even if Trump or Harris tightens exports, Chinese companies will still be less dependent on foreign technology. They will also be better prepared to deal with changes in the trade environment.

"The US has slowed China's growth in semiconductors, but not in other areas (like robotics). Now China can get everything it needs domestically," said Robert D. Atkinson, President of the Information Technology and Innovation Foundation (USA).

The Biden administration has also blocked China’s access to advanced AI chips from Nvidia. And that hasn’t stopped Chinese companies from investing heavily in AI. As of July, China accounted for 36% of the 1,328 global language models (LLMs), second only to the US at 44%, according to data from the China Academy of Information and Communications Technology.

Biden’s increased restrictions on technology have dashed Chinese business hopes that he would be more lenient than his predecessor, so this time around, tech companies have decided not to predict.

"We are in a new normal. When we don't know what's going to happen next, we just try to keep moving forward, as fast as we can," said the head of a major Chinese technology company.



Operate and exploit advertising by iCOMM Vietnam Media and Technology Joint Stock Company.
116 Thai Ha, Trung Liet Ward, Dong Da District, Hanoi.
Email: [email protected]
Editor in chief: DeThi
Tel: (+84) 903076053/7 Fax: (+84) 903030935
Responsible agency: Union of Science and High-Tech Production and Telecommunications (HTI) - Vietnam Academy of Science and Technology
Copyright © 2012 iCOMM Tech JSC