US v China Trade – The Real War Is Over Tech

The trade war between China and the US is a sham masking a much tougher fight over technology behind a row over trade tariffs, claims an investment expert.

The real battle is over the threat that the spread of Chinese technology running the internet, smart phones and other communications channels.

China is streets ahead of the rest of the world and the US and Europe are struggling to keep up, says Eoin Murray, head of investment at Hermes Investment Management.

The problem is China insists technology businesses “support, co-operate with and collaborate in national intelligence work”.

That’s what scares the Americans and the rest of the world.

5G back doors for spying

They fear China has built back-doors for spying into 5G technology – the next gen smartphone system.

“While the United States of USA remains very divided at present, the nation seems to be in agreement regarding the threat of Chinese technology. No one has articulated how it is a security issue quite yet,” said Murray.

“Everyone has been left behind by the Chinese, who have been the harbingers of change and advancement in the technology space.

“They are light years ahead of the rest of the world, with their development of 5G technology. The US, Europe and other developed nations have made forays into the technology, but are too far behind, and it would take billions in investment to catch up.

“In Europe, reports state that 30-40% of the 5G network remains committed to Huawei.

Modest concessions

“The key is, that with its dominance of 5G development, China has taken the future and is running with it. So, while the tech war may be hiding in plain sight as a trade war, the battle lines are deeply drawn – and one side seems to have outmanoeuvred the other already.”

President Trump’s negotiator Robert Lighthizer confirms the trade talks are entering their final weeks.

Murray says we should expect some modest Chinese concessions to shore up Trump as a deal maker as he launches into his re-election campaign.

“The tech war will be kicked down the road, pending very modest Chinese concessions that will allow President Trump to claim the world’s second biggest economy has capitulated to the first. This will be nothing more than a temporary resolution, lightly covering a series of issues still to play out,” he said.

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