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Is The 5G Race Part of The China-US Trade War?

Even during peacetime, world politics has a direct influence on the development and breakthrough of technologies. This stems from the desire to be the first to dominate, exert influence and establish monopoly. Take for example the space race, in the 1950s the two Cold War rivals, the Soviet Union and the United States are competing to achieve space flight capabilities. The race was evaluated based on technological, industrial and talents recruitment. It directly effects the level of influence as well as status quo of the two countries as superpowers in the world. This is because by achieving spaceflight, the technological edge directly impacts the Arms Race between the both countries. More than just a scientific endeavor, achieving spaceflight consolidates either country’s military power and testify to the capability in designing Intercontinental capable nuclear missile.

Space race

The Soviet Union had a head start when they achieved the first successful launch of spacecraft in 1957 and sent the first human to space in 1961, followed by the first woman to space in 1963. The achievements sent a message to the world that Soviet Union had an advantage in space technology during that time. This news drives the United States to go full force in reclaiming the leading the position by strengthening their research in space technology. Now, when talking about spaceflight, the country that comes in mind is usually the US, because they ultimately won the space race. And because of the space race, satellite communication technology is common and well developed. One can say that the race that is politically driven in turn results in one of the most significant technological breakthrough in the 21st century.

Technological-driven Economy

Plaza Accord 1980s

Countries continuously strive to remain economically powerful and dominant. In the 1980s, the U.S. was faced with a powerful Asian economic power, Japan. During the 1980s, the Japanese economy shifted its emphasis away from primarily agricultural products to telecommunications and computers industry. The rise of an information-based economy was led by major research in highly sophisticated technology, such as advanced computers. In the automotive industry, Japanese cars had a 33% hold on the American automobile market at that time which is seen as a major threat to the US government. As a result, a blame on the currency manipulation, “unfair” company subsidy and tariff has been put on Japan which sparked a trade war between Japan and United States. The United States achieved a tactical victory in the war with the 1985 Plaza Accord. The outcome was that U.S. imports dropped in price as the dollar fell and Japan entered the bubble economy, which ultimately lead to the Lost Decade of Japan.

So what can we learn from this whole incident? A Technology-driven economy is capable to keep a country strong and competent in the world arena in the 21st century. Japan, a country with no resources and with a collapsed economy rises after its defeat after WWII by this focus, enough to actually post a threat to the U.S. economically speaking, thus forcing the U.S. into a trade war with Japan to secure their economical interest. In fact, many Asian countries such as Korea, Singapore and Malaysia grows strong economically with an emphasis in research and technology.

The Plaza Accord affecting the Yen currency

5G and the China-US Trade War

Now, bigger stakes are at play. With the advent of the 5G Technology, a whole new area of unexplored economical opportunities are opened up for grabs. The world is watching who would be the first to establish a foothold in this “Whole New World”.

5G has the potential to completely change how we live our lives. It is not about downloading the data in faster speed with our mobile phones. It will fundamentally impact the country’s national and economic security and status quo as the leading nation in technological advancement.

By 2035, the full rollout of 5G technology could generate $13 trillion in global economic output. If one is able to monopolize the 5G technology market, it would provide a big boost to the economy of the country. Because of that, China is allegedly providing subsidies to companies to help them to undercut international competitors and corner the 5G market. In the race for tech supremacy, China is betting it can seize the lead by building the world’s biggest 5G wireless networks. It is achieving this through the tech giant Huawei. By the end of 2019, China is already deploying what is considered the world largest 5G network and infrastructures.

So has China won the 5G race? Not really. In 2018, The United States began imposing tariff and trade barriers on China. In response, China also started imposing tariffs to imports from America. This will come to be named as the China-US trade war. Among those trade practices and their effects are the growing trade deficit, the theft of intellectual property, and the forced transfer of American technology to China. As part of the many blows that comes with the trade war is the allegation and prosecution against Huawei by the U.S. This is interesting because Huawei one of the leading company in 5G technology in China.

Perhaps the prosecutions against Huawei has an underlying motive. Perhaps it is meant to slow down the inevitable emergence of China’s 5G powerhouse. One can only wonder. So this leaves us with some questions. Will the restrictions imposed on China telco manufacturers stop the further development and change the 5G technology leading position which is currently held by China? Will it cost China’s the lead in the race for 5G dominance? How will this trade war shapes the 5G technology of the whole world? With all these questions, one thing is for sure, the trade war is definitely a factor in shaping the 5G in the near future.

FILPAL designs, and builds RF and Microwave software and hardware for Cellular, Military, Academia and Test & Measurement applications.

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