PM Imran Khan appoints former Silicon Valley & IBM Executive as Chairperson for Special Technology Zones Authority (STZA)

Prime Minister Imran Khan has appointed Amer Ahmed Hashmi as Chairperson for the Special Technology Zones Authority (STZA), according to a notification issued by the cabinet division on Wednesday, 9th December 2020.


In accordance with the Ordinance for the establishment of Special Technology Zones Authority on December 02, 2020 by President Arif Alvi, the new authority will focus on the growth of scientific and technological ecosystem in the country, primarily through fostering the development of technology zones and high-tech industrial parks, thereby contributing to the acceleration of the evolution of the national system of innovation. Headquartered in Islamabad, the federal body will help promote the global competitiveness of the domestic technology sector, as well as provide institutional and legislative support for attracting foreign direct investments in the high-tech sector. The Prime Minister of Pakistan is the President of Board of Governors of the STZ Authority.


As a global strategist, IT executive, and entrepreneur, Amer Hashmi possesses diverse global experience in organizational leadership with companies like IBM and MCI System house. He was the founding CEO of Si3 – Pakistan’s pioneering technology outsourcing firm that helped stimulate IT systems integration in public and private organizations in Pakistan. His work has been featured in Forbes Asia, Businessweek & Financial Times UK.

Mr. Hashmi spent the last 10 years building knowledge ecosystem in his capacity as Advisor and Chief Strategy Officer at National University of Sciences & Technology (NUST). He was also the Chairman of Executive Committee of NUST Science & Technology Park and founding President of the Global Think Tank Network (GTTN).


Mr. Hashmi is a graduate of York University, Toronto and has been trained in several technical and specialized programs including an executive leadership on ‘Innovation for Economic Development’ from Harvard’s Kennedy School of Government.

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CPEC initiative: Zong introduces unlimited calls to China

The launch of this bundle is in-line with our strategy of connecting both private and corporate customers, says Zong spokesperson.Pakistan’s telecommunication operator, Zong 4G has introduced unlimited calls to China under its China-Pakistan Economic Corridor (CPEC) initiatives.

“The China bundles offer unlimited calls to China for both prepaid and postpaid customers with a weekly bundle worth PKR 250+tax for prepaid customers and a monthly bundle worth PKR 750+tax for both prepaid and postpaid customers,” read a statement from the telecom provider.

“Zong 4G has always strived to provide its customers with unmatched and innovative products and services. As the connectivity partner for CPEC, Zong 4G has undertaken many initiatives and the launch of this bundle is in-line with our strategy of connecting both private and corporate customers,” said Zong 4G’s Spokesperson.

The China Pakistan Economic Corridor (CPEC) is a multi-billion dollar project, under which China is building major infrastructure projects including roads, power plants, and special economic zones in Pakistan to improve connectivity between the two allied nations and the region in general.

Source: Business Recorder 


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Pakistan eyes E-Commerce for economic growth

Abdul Razak Dawood, advisor to Pakistani prime minister on commerce, textile, industry and production, and investment, said on Monday that the special focus of the government on e-commerce policy will benefit the country, particularly giving a quantum jump to its exports.

Addressing a workshop here on e-commerce, the advisor said that in line with the government’s vision of “Digital Pakistan”, many lacunas in the procedural framework will be fixed.

“The moment we start minimizing the interaction between people with everything working online, then corruption will go down, inefficiency will go down and we will be able to move in a much, much faster way,” he said.

Currently, Pakistan’s services sector exports are around five billion U.S. dollars, said Dawood, adding that prioritizing opportunities for the startups and small and medium-sized enterprises (SMEs) through the policy of digitization and e-commerce, service exports could be enhanced to a great extent.

According to a report about the e-commerce policy framework of Pakistan released by the country’s commerce ministry in September 2019, there are over 3.2 million SME units in Pakistan, accounting for 98 percent of all the enterprises, and the SMEs employ “nearly 78 percent of the non-agriculture labor force in Pakistan and contributes more than 30 percent” to the overall gross domestic product (GDP).

“E-commerce is an opportunity to bring SMEs in the mainstream and connect them with international markets through global e-commerce platforms as well as Pakistani online market places,” the report added.

Talking to Xinhua, Badar Khushnood, a member of the Pakistani software houses association P@SHA, said that the China-Pakistan Economic Corridor (CPEC) is providing a great opportunity to Pakistan to learn and collaborate with Chinese tech giants like Tencent and Alibaba to tap its e-commerce potential.

Khushnood is of the view that companies like Alibaba, Uber and Careem have conducted B2C business in the country, and the business can be further expanded within the B2B framework as well.

According to a report released by the website which is managed by the U.S. Department of Commerce, it is estimated that Pakistan has around 32 million Facebook users, and one of the highest rates of smartphone penetration in South Asia at nearly 34 percent. This makes it a potential market for e-commerce services and businesses.

Jawaid Ghani, professor of strategy and marketing research at Karachi School of Business and Leadership, told Xinhua that e-commerce facilitates make transaction easier, which is essential for foreign direct investment.

To increase exports, Pakistan has to introduce new e-commerce avenues as this would increase economic activity across all levels including B2B, B2C and C2C, he said.

The report also noted that a large component of Pakistan’s economy is informal and this is mainly because the majority of transactions are conducted in cash, except for those that are very large and require a bank draft or pay order. The majority of the local companies especially the SMEs are undocumented and therefore out of the tax net.

Ghani said that e-commerce and digital payment services would ensure transparency in transaction along with bringing the documentation of the undocumented transfer of money.

The McKinsey Global Institute report estimated that Pakistan can have an increase of a cumulative seven percentage points in its GDP along with the generation of around four million new jobs during 2016-2025 through utilizing digital financial services alone.

Source: Xinhuanet


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Huawei Tech Day for IT influences in Pakistan

Huawei IT Tech Day 2020 started here in Islamabad. The summit is a three-day platform for ICT influences, government officials, and industry leaders in Pakistan designed to exchange viewpoints, keep the community updated with the latest trends in technology and experience first-hand technological innovation involving IT development.

PTA Chairman, Major General(R) Amir Azeem Bajwa was the chief guest of the event. Minister Counsellor in the Economic and Commercial Office of the Chinese Embassy, Dr. Wang Zhihua, Member IT, Ministry of Information Technology & Telecom Junaid Imam and Deputy CEO Huawei Pakistan, Ahmed Bilal Masud were also present at the event.

The theme of the event, ‘IT Inspires Digital Pakistan’ revolved around three key areas of focus: ‘The road to 5G’, ‘Digital Innovation Shaping the 5G Era’, and ‘Artificial Intelligence – The New World.’ Huawei invited global experts from Europe, Asia, and the Middle East to present their industry insights and successful practices in preparation for 5G. To be better able to cope with the speed with which these industries are evolving, and to contribute to a ‘Digital Pakistan’, 15 special technology demo booths presented live demonstrations showing how real-time IT solutions work.

Chairman PTA Major General(R) Amir Azeem Bajwa while appreciating the initiative to further incorporate digitalization, remarked, “We have been given authorization to carry out tests and trials of 5G, we’re all very excited about it. I’m sure Huawei will have a very major role to play in the launch of 5G services in Pakistan. Emerging technologies like IoT, virtual reality, artificial intelligence and 5G will spur Pakistan towards its digital drive. I thank Huawei for organizing this wonderful event and giving me an opportunity to come here and witness some of the latest technological innovations.”

Minister Counsellor from Chinese Embassy Dr. Wang during his speech encouraged Huawei to bring more of its latest technologies to Pakistan, he further said the Chinese government will encourage more of its high-tech companies to come and invest in Pakistan. “You have the core strength of youth, and amazing IT talent. The way things are going, we are sure that Pakistan will fulfil its goal of becoming ‘Digital Pakistan’ quite soon.”

In a similar vein, Deputy CEO of Huawei Pakistan Masud commented that “Huawei will continuously increase its investment in Pakistan and provide the latest technologies including Full-stack cloud solution, Intelligent Computing, Intelligent Storage & Smart Data Centre solution to help customers accelerate intelligent transformation and build Digital Pakistan.”

The event comes not long after the Pakistan Government announced the ‘Digital Pakistan’ initiative, with telecom companies Zong and Jazz having successfully conducted 5G trial tests in the country. The event will be held for 3 days in Crystal Ball Hall in Marriott Hotel, Islamabad. Technology experts and concerned officials are welcome to attend and see the live demos.

Source: The News

Dated on: 09/01/2020


Chinese Satellites to benefit Belt & Road Countries

China’s heavy lift launch vehicle Long March-5 returned to flight after a break of more than two years, as it successfully sent a high throughput Communication Satellite Shijian-20 into planned orbit on Friday, marking a huge comeback for the currently strongest member of the Country’s carrier Rocket Family.

The 20 story tall rocket about 57 meters in height, codenamed Long March-5 Y3 for the mission, took off from Wenchang Space Launch Center in south China’s Hainan Province on Friday around 8:45 pm, and after a flight of approximately 30 minutes, the rocket successfully placed the Shijian-20 satellite, whose weight at launch was over 8,000 kilograms, into the planned geosynchronous orbit (GEO).

The satellite is by far the country’s heaviest GEO satellite, whose full wingspan of solar panels exceeds 40 meters, some 10 meters longer than those of a Boeing 737 airplane.

Shijian-20 is an experimental satellite designed to test the country’s new generation large GEO satellite platform, the Dongfanghong-5, or DFH-5, Pang Zhihao, a Beijing based expert in space exploration, told.

A Number of high throughput Satellites with message capability of up to more than 1 terabyte per second (Tbps) will be developed based on the platform and to provide Communication and Internet Services to Countries and Regions along the Belt & Road Initiative by 2022, according to Satellite Developer China Academy of Space Technology, under the biggest Chinese state backed aerospace contractor China Aerospace Science & Industry Corp (CASC).

Super 2020

The Friday launch mission also marked the third flight of Long March-5, which took place more than two years after a July 2017 launch failure on the rocket’s second test flight due to an engine problem, according to its developer, the China Academy of Launch Vehicle Technology (CALT), also under CASC.

The successful flight of Long March-5 has given impetus to China’s ambitious heavy payload space projects for a “Super 2020,” during which the country plans to perform missions including the Chang’e-5 lunar sample return mission and the country’s first Mars probe mission, according to the developer, as well as the construction of the country’s future space station.

“It shows that Long March-5 rockets have accelerated its development toward the engineering application stage,” said Wang Xiaojun, Director of the CALT.

“By 2020, we plan to launch the Long March-5B for the first time, for the Chang’e-5 lunar sample return mission and a Mars probe,” he revealed.

Wang Jue, chief commander of the Long March-5, said that to accomplish the Chang’e-5 mission, which includes sending the probe weighing more than eight tons into the Earth-Moon transfer orbit, the carrier rocket must have large payload capabilities.

According to the CALT boss, work on the Long March-5 rocket families for the later missions is going smoothly.

Li Dong, a chief designer of the Long March-5, told that there are two configurations of the heavy-lift carrier rocket. Long March-5B, a smaller variant of the rocket with a maximum payload capability of around 25 tons to low Earth orbit (LEO), will provide strong support for the construction of China’s planned manned space station.

Another configuration of the rocket will be capable of sending payloads of up to 14 tons to the geosynchronous orbit and will serve missions such as lunar sample returns and deep space exploration, Li said.

Li hailed the development of the Long March-5, as it will greatly enhance the country’s space capability. According to the plan, a Chinese mission will make a soft landing on Mars by 2021.

Big Ticket to Space Powerhouse Club

It is safe to say that the Long March-5, with a core diameter of five meters, which is almost double China’s previous payload lifting capabilities, is a big-ticket giving China entry into the world space powerhouse club, Wang Ya’nan, Chief Editor of Aerospace Knowledge Magazine, told.

The “big ticket” will not only provide direct support for imminent deep space exploration programs such as the Chang’e-5 lunar probe and the country’s first-ever Mars probe but will also test the reliability and maintenance capability of the country’s heavy-lift engines including liquid oxygen kerosene engine and liquid hydrogen-oxygen engine, paving the way for the next generation of super heavy-lift launch vehicles such as the Long March-9, Wang noted.

China’s heavy-lift carrier rocket, the Long March-9, is expected to make its maiden flight around 2030 and will support manned lunar exploration, deep space exploration and construction of a space-based solar power plant, the News Agency reported in March quoting the CALT.

The diameter of the body of the Long March-9 rocket will be nearly 10 meters, according to media reports.

As of Friday, all 18 launch missions of carrier rockets developed by CALT have been completed, with a perfect run of 18 straight successes, according to a CALT official report on Friday.

The perfect run includes 12 from the Long March-3A rocket family, accomplishing missions for the deployment of four communication satellites, one GEO relay satellite and 10 satellites for the BeiDou Navigation Satellite System, or BDS.

Also, the year 2019 witnessed China’s first-ever successful rocket launch at sea on June 5, which blasted off from a platform on a large semi-submersible barge in the Yellow Sea and sent two technological experiment satellites and five commercial satellites into the preset orbit.

With more than 30 successful rocket launches this year, China hopes to lead the world for the second year in launch numbers, which also showcases the nation’s high-performing aerospace technology, space experts said.

Source: Belt and Road News

Dated on: 29/12/2019


China rolls out 5G mobile phone technology before schedule

China‘s three state telecoms companies on Thursday announced the roll out 5G mobile phone services, marking a key step in Beijing’s ambitions to become a technology superpower while it remains locked in a trade war with Washington.

China Mobile, China Unicom and China Telecom said on their websites and online stores that 5G plans, which start from as low as 128 yuan ($18.2) a month, will be available from Friday, allowing Chinese consumers nationwide to use the ultra-fast mobile internet service.

However, all three had already started offering access to the service on Thursday morning.

Beijing had originally said it would launch the ultra-fast mobile internet service, which promises to support new features such as autonomous driving, early next year. But it accelerated its plans as tensions with the United States, especially over its boycott of telecoms giant Huawei Technologies, heated up.

“China will have the largest commercial operating 5G network in the world on Friday, and the scale of its network and the price of its 5G services will have a pivotal impact throughout the supply chain,” research firm Bernstein said in a report this week.

Authorities have said that they plan to install more than 50,000 5G base stations across 50 Chinese cities in the country by the end of this year, and that big cities, including Beijing, Shanghai, Guangzhou, and Hangzhou, are already covered by the 5G network.

More than 10 million mobile plan subscribers who have pre-registered for 5G will have access to faster videos and games, more virtual reality applications and improved performance for mobile videoconferencing.

Smartphone companies from Xiaomi to Huawei have also unveiled new products in anticipation of the 5G roll out, with Huawei saying that it anticipates to start seeing a revenue uplift from the sector next year.

Xiaomi said earlier this month that it plans to launch more than 10 5G phones next year and that there was a fear in the industry that consumers would stop buying 4G models.

Despite the pressure from the US on other countries not to partner with Chinese firms for 5G technology, Huawei said in July that it had signed more than 60 commercial contracts to supply 5G networks around the world, including at least 28 in Europe.

Source: Aljazeera

China Telecom Gears up to Develop Blockchain-Enabled 5G SIM Cards

China Telecom has divulged strategies to develop blockchain-enabled 5G ready SIM cards, reveals a Chinese website Sina News.

The leading China Telecom’s research arm issued the white paper mentioning vital plans on the sidelines of China International Smart Industry Fair recently. The paper highlights important details of a SIM card that will extend support for ERC20 tokens and Ethereum. It will have compatibility with almost all kinds of smartphones. The paper further details crucial plans to change a smartphone into a decentralized node. The move seeks to establish a highly secure network whenever a buyer purchases a device.

Meanwhile, the news has brought huge cheer for those seeking to purchase and sell cryptoon their devices. China telecom has its eyes set for a bigger prize that is 5G.

In the coming 10 years, China and leading Chinese companies have plans to invest a whopping $411 billion in 5G, as per the information provided by China Academy of Information and Communication Technology.

The 5G period is expected to bring overflow of data as scores of IoT enabled and other devices take benefits of new bandwidth. It may also cause privacy and security concerns as well. Because amid huge flow of data there will be rise in opportunities for prying eyes. However, China follows a tough policy towards crypto, its state telecom provider is speculating very big on the prospective of the tech to boost privacy and security in the 5G age. According to the paper, blockchain has emerged as the only technology which will allow users to protect their fragile data in the yet to arrive 5G period irrespective of the variety of data’s flow and variety of dimension.

The whitepaper also highlighted a few applications that the blockchain-enabled smartphone may have. According to the whitepaper, the blockchain application ecosystem aims to solve big issues in operation various mobile networks that may include harassment, data loss, crime related identity theft, fraud etc. China Telecom’s initiative to use blockchain will help in creating blacklists linked with reliable IMEIs and encrypt it via blockchain. The moment a mobile device gets blacklisted, the leading carriers, smartphone suppliers and final users can instantly recognize and disable stolen devices through the technology.

The white paper also slammed the low quality technical performance of current blockchain smartphones including Samsung’s Galaxy S10, and HTC’s Exodus One. The paper also accused Samsung and co of playing to the crypto markets by preferring the incorporation of specific blockchains instead of accomplishing a high technical standard.

China Telecom is of the opinion that it can perform better. However, many have cast doubts whether the telecom giant’s dream of privacy enhanced phones will see the light of the day in a nation where privacy is policed.

Source: CryptoNewsZ

Dated on: 2/9/2019

ZTE launches its first ever 5G smartphone in China

ZTE has already announced its 5G smartphone in China which is also available for preorders since Tuesday in China. The increasingly competitive market of 5G is currently open for big players to jump in and showcase their gimmicks.

ZTE becomes the first smartphone manufacturer to announce the 5G smartphone in the country, its price, and presales.

The smartphone is named ZTE Axon 10 Pro 5G is powered by Qualcomm’s Snapdragon 855 SoC along with 4000mAh battery with wireless charging support.

Apart from 5G capability, the phone displays 6.47-inch AMOLED screen with waterdrop notch, it also exhibits triple main camera with 48MP+20MP+8MP combination, having main, ultra-wide-angle and telephoto sensor respectively.

ZTE Axon 10 Pro 5G is available for purchase from ZTE official website and some other e-commerce platforms including JD, TMall and The phone is priced at 4,999 yuan ($727).

ZTE announced presales after it got secure certification for 5G smartphone, Huawei, Oppo, Vivo, and OnePlus already had their respective certificates for 5G phones.

The 5G smartphone market is inflating, China is not only the place where the Chinese manufacturers have to sell all their 5G smartphones, China alone accounts of 2% of the entire 5G market, China Daily reported.

Huawei’s Mate 20X 5G is just around the corner, the company is expected to release the phone on Friday. The competition becomes intense and ZTE is mulling to grab the earliest attention it could before the launch of other 5G phones in the market.

However, James Yuan, director of research at Counterpoint Technology Market Research is not much positive about ZTE 5G phone, he expects that the competition is so intense and relative to the brand authority. ZTE’s 5G smartphones may not sell well during this year, said Yuan.

Launching first 5G smartphone in China is the major step forward for ZTE, but the company needs to make greater endeavors on promoting its products that are innovative, said, Roger Sheng, VP analyst at consultancy Gartner.

“Currently, all phone vendors except Huawei have to rely on chipsets from other companies. This may place Huawei at an advantageous position in the 5G market and of course it is resourceful and bigger smartphone manufacturer in China,” he added.

According to the research conducted by Canalys, Chinese consumers are expected to account for one-third of the world’s 5G-enabled smartphones within the next five years.According to the forecasts as much as 17.5 percent of the 5G smartphones will be shipped in China by the next year and the percentage could rise strongly to 62.7 percent in 2023.

Source: RS News

Date: 5/8/2019

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China built a tower that acts like ‘the world’s biggest air purifier,’ and it actually works

Source: Business Insider
Date: December 21, 2018
  • Scientists say an experimental tower in northern China, dubbed the world’s biggest air purifier, appears to be working.

  • Researchers at the Institute of Earth Environment at the Chinese Academy of Sciences say they have seen improvements in the air quality over an area of more than three square miles in the past few months.

  • The tower works through greenhouse coverings. Polluted air is sucked in, heated up by solar energy, and then circulated through multiple layers of cleaning filters.

  • A number of locals say they have noticed a difference in the air quality, even during the winter when the city is especially prone to pollution.

    An experimental tower over 100 meters (328 feet) high in northern China — dubbed the world’s biggest air purifier by its operators – has brought a noticeable improvement in air quality, according to the scientist leading the project, as authorities seek ways to tackle the nation’s chronic smog problem.

    The tower has been built in Xian in Shaanxi province and is undergoing testing by researchers at the Institute of Earth Environment at the Chinese Academy of Sciences.

    The head of the research, Cao Junji, said improvements in air quality had been observed over an area of 10 square kilometers (3.86 square miles) in the city over the past few months and the tower has managed to produce more than 10 million cubic meters (353 million cubic feet) of clean air a day since its launch. Cao added that on severely polluted days the tower was able to reduce smog close to moderate levels.

    The system works through greenhouses covering about half the size of a soccer field around the base of the tower.

    Polluted air is sucked into the glasshouses and heated up by solar energy. The hot air then rises through the tower and passes through multiple layers of cleaning filters.

    “The tower has no peer in terms of size … the results are quite encouraging,” said Cao.

    Xian can experience heavy pollution in winter, with much of the city’s heating relying on coal.

    xian china air pollution
    The world’s biggest air purifier is being tested in Xian in an effort to remedy the nation’s smog problem without costing a fortune.
     Zhang Yuan/China News Service/VCG via Getty Images

    The tower’s operators say, however, that the system still works in the cold months as coatings on the greenhouses enable the glass to absorb solar radiation at a much higher efficiency.

    Cao’s team set up more than a dozen pollution monitoring stations in the area to test the tower’s impact.

    The average reduction in PM2.5 – the fine particles in smog deemed most harmful to health – fell 15 percent during heavy pollution.

    Cao said the results were preliminary because the experiment is still ongoing. The team plans to release more detailed data in March with a full scientific assessment of the facility’s overall performance.

    The Xian smog tower project was launched by the academy in 2015 and construction was completed last year at a development zone in the Chang’an district. The purpose of the project was to find an effective, low-cost method to artificially remove pollutants from the atmosphere. The cost of the project was not disclosed.

    air purifier tower china
    The tower’s operators say, however, that the system still works in the cold months as coatings on the greenhouses enable the glass to absorb solar radiation at a much higher efficiency.
     VCG/VCG via Getty Images

    What was previously thought to be the largest smog tower in China was built last year by Dutch artist Daan Roosegaarde at 798, a creative park in Beijing.

    The seven-meter (23-feet) tall tower produced about eight cubic meters (282.5 cubic feet) of clean air per second. It was entirely powered by electricity, most of which is generated by coal-fired power plants in China.

    Daan Roosegaarde smog tower .JPG
    Dutch artist and innovator Daan Roosegaarde poses in front of the Smog Free Tower.
    Damir Sagol/Reuters

    Cao, however, said their tower in Xian required little power to run.

    “It barely requires any power input throughout daylight hours. The idea has worked very well in the test run,” he said.

    Several people in Xian told the South China Morning Post they had noticed the difference since the tower started operating.

    A manager at a restaurant about 1km (0.62 miles) northwest of the facility said she had noticed an improvement in air quality this winter, although she was previously unaware of the purpose of the tower. “I do feel better,” she said.

    A student studying environmental science at Shaanxi Normal University, also a few hundred meters from the tower, said the improvement was quite noticeable.

    “I can’t help looking at the tower each time I pass. It’s very tall, very eye-catching, but it’s also very quiet. I can’t hear any wind going in or out,” she said. “The air quality did improve. I have no doubt about that.”

    china smog
    Researchers say they hope to build larger smog towers in other cities in China.
     Kevin Frayer/Getty Images

    However, a teacher at the Meilun Tiancheng Kindergarten on the edge of the 10-square-kilometer (3.86-square-mile) zone said she had felt no change. “It’s just as bad as elsewhere,” she said.

    The experimental facility in Xian is a scaled-down version of a much bigger smog tower that Cao and his colleagues hope to build in other cities in China in the future.

    A full-sized tower would reach 500 meters (1,640 feet) high with a diameter of 200 meters (656 feet), according to a patent application they filed in 2014.

    The size of the greenhouses could cover nearly 30 square kilometers (11.6 square miles) and the plant would be powerful enough to purify the air for a small sized city.

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How A Growing U.S.-China Rivalry Is Reshaping The Global Tech Landscape

Source: Forbes
Writer: Alex Capri
Date: December 09, 2018

For observers of the U.S.-China geopolitical rivalry, the arrest of Huawei’s CFO, Meng Wanzhou, in Canada, should serve as a wakeup call for the rest of the tech sector. The allegations against China’s telecom giant for breaching U.S. sanctions highlights the escalating technology race and hybrid cold war between the world’s two superpowers.

Washington and Beijing are now at a historical tipping point, and national security priorities are driving policies that will lead to further decoupling of American and Chinese interests. This, in turn, will lead to further fragmentation of global value chains in the tech sector.

Tech companies—or any firms that depend on cutting edge technology—will need to gauge their risk environment around two key factors: First, how to react to a wave of disruptive policy measures such as export controls, sanctions, blocked acquisitions and blocked technology transfers. Second, how to minimize the damage that will come as a result of disentanglement from existing technology ecosystems.

 Beijing’s provocative tech agenda

At the heart of this competition is the Made in China 2025 plan, Beijing’s strategy to lead the world in AI, robotics, aerospace and other industries.

China’s rapid advancement in technological capability has in many ways caught Washington and its allies flatfooted. Since 2017, For example, Beijing has been creating a navigational satellite constellation to rival America’s GPS. In 2018 alone, it launched 11 BeiDou satellites, some as few as 17 days apart.

 Beijing can now offer its partners an alternate version of America’s GPS, thereby undermining Washington’s geopolitical monopoly in this area, and it can  leverage the BeiDou program to extract concessions from its client states, such as agreements to buy more Chinese digital infrastructure and equipment.In the competition to win the battle of 5G standards— the technology that provides lightning-fast connectivity and better bandwidth in the internet of things (IOT)—China is leveraging its 650 million mobile internet users and its planned infrastructure along the digital Belt and Road to expand its global influence.

In a bid to become self-sufficient and cut its reliance on foreign semiconductor technology, Beijing is reportedly investing $31.5 billion in a National Integrated Circuit Industry Investment Fund, among other funds.

Lately, Beijing’s focus has increasingly turned to what it calls “civil-military fusion.” Recently, a series of state-backed venture capital funds have brought together tech startups and other private companies with the Peoples Liberation Army. In 2017, for example, the Foshan Civil-Military Innovation Industries Fund was launched to the tune of $28.75 billion.

Washington’s technology counter-offensive

The U.S. Department of Defence (DOD) now officially lists China as an “adversary.” A recent DOD report list key areas of strategic focus including Beijing’s efforts to leverage technology to modernize its military, and its plans to harness the Belt and Road Initiative to further enhance its economic clout. This has fed a popular narrative in Washington and beyond that China’s strategic ambitions need to be confronted and contained. Thus, firms should expect to see fewer technology transfers to Chinese companies, the blocking of deals (such as Huawei getting locked out of the U.S., Australia and possibly the U.K. and Japan) and the placement of targeted individuals and firms on sanctions lists. Whether all of this will produce the desired outcome by Washington and its allies is, of course, debatable.

The U.S. Export Control Reform Act, passed in August, will lead to the expansion of an export controls list. There will be new export licensing requirements for a broad range of so-called dual-use technologies–defined as technologies that can be use for commercial and military purposes. In the digital economy, this will impact a wide range of industries: robotics, AI, autonomous vehicles, even facial recognition technology. The effects could be widespread, with collateral damage to foreign firms.

Chinese smartphone maker ZTE serves as a cautionary tale. Its reliance on U.S. technology for both components like microchips and software from the Android operating system highlights China’s dependence on foreign suppliers.

Hikvision, China’s largest maker of facial recognition surveillance equipment, may suffer a fate similar to ZTE, as the U.S. government is threatening to ban Silicon Valley chipmakers from selling it American technology. Unlike ZTE, however, which avoided a likely collapse when Washington agreed to waive the technology ban, Hikvision may not be so lucky.

China’s major Achilles heel continues to be its dependence on foreign semiconductor technology. Every area of Beijing’s Made in China 2025 plan relies on foreign-owned integrated circuit technology, with much of it coming from five American manufacturers: AMD, Intel, Micron, Nvidia and Qualcomm.

Even Yangtze Memory, Beijing’s state-funded national champion, which recently announced that it had developed a state-of-the-art 64-layer 3D NAND flash memory chip, will depend entirely on critical early-stage equipment—needed for mass production—from foreign firms. Primary partners are Applied Materials and KLA-Tencor, both American companies.

The Scale of disentanglement

All of this leaves the global tech sector in a highly vulnerable position. Increasing U.S. export controls that restrict or block access to American technology could cause major damage to Beijing’s geopolitical aims. But foreign firms will suffer collateral damage as well, as they will be penalized for being imbedded with denied parties.

Over the past three decades, for example, the American companies named above have invested billions of dollars in collaborative ventures and production facilities in China. For all the world’s leading semiconductor firms, China will soon become their largest market.

According to PWC’s Global Strategy group, 80% of the corporate research and development (R&D) money spent in China in 2017 came from non-Chinese multinationals. Disentangling these ecosystems will require dismantling complex, intertwined relationships, with potentially heavy economic and financial consequences across global value chains.