In its subsequent ‘US strategic approach to the People’s Republic of China report, published on the 20th, America said: “The administration is implementing the Foreign Investment Risk Review Modernization Act to update and strengthen the capacity of the Committee on Foreign Investment in the United States (CFIUS) to address growing national security concerns over foreign exploitation of investment structures, which previously fell outside CFIUS jurisdiction.
“This includes preventing Chinese companies from exploiting access to US innovation through minority investments in order to modernize the Chinese military. The US has updated its export control regulations, particularly in light of Beijing’s whole-of-society strategy and its efforts to acquire advanced technologies related to hypersonics, quantum computing, artificial intelligence, biotechnology, and other emerging and foundational technologies. We are also engaging allies and partners to develop their own foreign investment screening mechanisms, and to update and implement export controls collaboratively through multilateral regimes and other forums….
“Domestically, the Administration is taking steps to strengthen the US economy and promote economic sectors of the future, such as 5G technology, through tax reforms and a robust deregulatory agenda. The President’s ‘Executive Order on Maintaining American Leadership in Artificial Intelligence’ is an example of a US government initiative to promote investment and collaboration to ensure the US continues to lead in innovation and setting standards for a growing industry.”
But the horse might have bolted. In the ChinaTalk article, Huawei has done enough over the past few years to survive. “The main issue is supporting Huawei in maintaining its dominant position in 5G and helping it continue to be able to supply the needs of 5G bases.
“In addition to stockpiling goods and accelerating the localization of the semiconductor manufacturing process, this requires a national counterattack. Although it is difficult to force the United States to lift the Huawei ban, China has two paths open to it: China can make America companies feel the pain, and, more importantly, China can adopt measures to hinder the development of 5G technology in the United States. Any companies that can help America achieve its goals in terms of 5G development should be the targets of this counterattack.
“For the first line of attack, Boeing is a good target; for the second line of attack, Qualcomm is a good target. Apple also fits the first target, but Apple’s supply chain is deeply tied up with China, so targeting Apple would also harm China.”
With Tencent and Alibaba announcing investments in deep tech of hundreds of billions of yuan and able to access deep capital markets the localisation and globalisation strategy has reached critical mass.
The past decade’s strategic investment boom has opened the door to innovation wide enough. The tech-lash on strategic pinch points in core sectors – a third of corporate venturing is in deep tech areas, according to GCV Analytics – Israel, Taiwan and other tech centres will begin.
Next week’s deep tech roundtable as part of the GCV Digital Forum will discuss this further.
