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Impact of Trade War on the Chinese market

The U.S. and China have been tit-for-tat within the ongoing trade war between the two countries. However, Chinese chipmakers are now saying it’ll be unattainable to fulfill China’s nationwide targets without access to American technology, reports Nikkei Asian Review.

In a bid to boost its domestic market—and conveniently wean itself from international dependence—Beijing has set ambitious goals to domestically source 40 % of all chips utilized by Chinese trade by 2020, and raise that to 70 % by 2025. Nevertheless, industry leaders are skeptical these lofty goals will be reached without U.S. tech.

According to Nikkei’s report, the self-sufficiency rate among Chinese chipmakers was just 15 % in 2018. Sources cited within the story, speaking on condition of anonymity, also stated the gap between China’s nascent market and the United States more mature market is too large to beat in such a short while. “If we lose entry to U.S. software program or cannot receive updates, our chip growth will run into a useless end,” a leading Chinese artificial intelligence chipmaker reportedly told Nikkei.

It’s hard to predict how far-reaching the fallout from the U.S. and China’s chilly tech relations shall be. Within the short-term, nevertheless, you can guess it’s already inflicting headaches for corporations on either side of the Pacific. Apple is mulling moving 15 to 30 p.c of manufacturing outdoors of China, whereas Huawei’s had to cancel the launch of its new MateBook laptop. Even FedEx is pissed—it is suing the U.S. government over the Huawei restrictions, as it can’t verify the content of every single package it handles.

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