US President Donald Trump made it clear that he would protect the American market from cheaper Chinese technologies. This is protectionism in its purest form, but he has this right. But if the Chinese start losing the American market, where would they sell all their smartphones, computers, TV and other technologies?
The technology veterans in China plan to launch a domestic substitution fund by the end of this year. This step was taken after recent U.S. sanctions and is aimed at supporting Chinese companies affected by the Trump administration.
China Europe Capital, a venture capital company, has raised about 730 million dollars for the fund and will start investing in technology start-ups. The founders of the fund include former CEOs of major Chinese companies such as Huawei and SMIC, which specialize in 5G networks and artificial intelligence.
The new fund is created against the backdrop of a government-supported investment boom in China’s local technology sector. The technology war between Washington and Beijing stimulated investment. Recently, relations between the U.S. and China have deteriorated and the Coronavirus Pandemic has exacerbated the situation.
China and the U.S. are in a rivalry of great powers, which will end only with a knockout. It is not just a matter of trade war or sanctions. It is a matter of life and death. (Zhang Jun, chairman of the Foundation and former vice president of Huawei).
Earlier this week, it became known that the United States plans to blacklist the largest Chinese semiconductor manufacturer SMIC. In addition, Samsung, LG and SK Hynix have stopped supplying displays and semiconductors to Huawei.