by bochen787 » Fri 16 Oct 2020, 01:40:48
Huawei Plays Matador to Trump's Bull | Opinion
David P. Goldman , Deputy editor and columnist, Asia Times
On 10/14/20 at 7:00 AM EDT
Bulls usually lose bullfights not because they fail to charge, but because they charge at the matador's cape rather than at the matador himself. President Trump has no qualms about charging at China's national champion Huawei, but he is charging at the equivalent of the matador's cape.
Consider Huawei's handset business, which depends on high-end chips manufactured by Taiwanese foundries. Because the Taiwanese use some American equipment to manufacture the chips, the U.S. has imposed an effective blockade on Huawei's outsourcing, and China does not (yet) have the domestic capability to make high-end chips. A similar ban blocks Huawei's access to key American chip-design software.
Huawei will lose market share in the low-margin handset business, and Chinese competitors like Xiaomi will pick up the slack (which explains why the latter's stock price has jumped this year from HK$8 to HK$22). Huawei will have little difficulty using older chips for 5G base stations, installing the lion's share of the six million units that China has ordered to build out its 5G network over the next two years.
Huawei's most important business, though, will emerge unscathed from U.S. sanctions. American strategists think that Huawei is a telecom equipment company. Among other things, Huawei is the world's largest telecom equipment manufacturer, with a 31 percent market share during the first half of 2020—more than the combined share of the second and third position companies, Ericsson and Nokia. Huawei, though, is first and foremost a big data and artificial intelligence (AI) company—the most inventive and imaginative one in the world. Let's call this combination "BD/AI," for short.
BD/AI has already had world-moving consequences in health applications. For example: China will test all nine million inhabitants of Qingdao for coronavirus over five days, after medical authorities detected nine cases of infection. The United States, meanwhile, was reporting an average of about 50,000 cases per day as of earlier this week. Notably, the U.S. has done far more testing than China per capita, with more than 357,000 tests per million of population to date, compared to just 111,000 in China, according to Worldometers.info. Apart from selective, short-term lockdowns, life in China has returned to normal, with more than half a million tourist journeys booked during last week's mid-autumn holiday—all while much of daily life in America remains paralyzed by the pandemic.
The difference lies in data and use of AI to analyze the data. China required far fewer coronavirus tests per capita because its AI systems identified prospective clusters of infection. Small amounts of selective forensic testing guided by AI forecasts preempted larger outbreaks—and where smaller outbreaks occurred, massive testing extinguished the spread of the virus.
If AI is the engine of the Fourth Industrial Revolution, data is the engine's fuel. Gathering and porting data into a usable framework, as Huawei Chief Technology Officer Paul Scanlan explained in my recent book, is the "control point" in today's world economy. There's no secret about this, no recondite conspiracy, no subtle design. Huawei proclaims its intentions at conferences streamed live on the web, and encapsulated in YouTube videos like this one.
Oil determined much of the geostrategy of the past century. Hitler sent the German army south toward the oil-rich Caucasus, rather than east towards Moscow in 1942, and the British fought Rommel in North Africa to protect the Suez Canal route for its oil tankers. Russia and the United States wrangled over the oil-rich Middle East throughout the Cold War. The Arab oil boycott of 1973 sent the U.S. into recession and near defeat in the Cold War; the collapse of oil prices in the 1980s hastened the fall of the Soviet Union. All the old geopolitical models arose from concern over trade routes as control points for the transshipment of oil. They are now as obsolete as Macedonian phalanx tactics in the 3rd century B.C.E., or Napoleonic artillery manuals.
Data is now the control point. A central premise of American policy toward China is that Huawei intends to steal Western data. On the contrary: China is the main collector and provider of data in the fields where it counts the most—for example, medicine. Every European pharmaceuticals company of importance has a BD/AI joint venture in China, because China has digitized the health records and sequenced the DNA of hundreds of millions of its citizens, and can correlate this data to real-time vital signs of hundreds of millions more people. To be sure, Chinese citizens have no protection by privacy laws that have made it impractical to digitize health records in the United States. This is a soluble problem, at least in theory. The technology exists—for example, through block chain accounts—to anonymize individual records while permitting data collection.
Ant Financial's 900 million customers comprise the largest consumer finance database in the world. The company's pending $40 billion initial public offering, the largest in history, reflects a multi-hundred-billion-dollar valuation that stems from Ant's capacity to analyze consumer and small-business creditworthiness in a way that may put traditional banking out of business. TikTok's two billion downloads gives its parent, ByteDance, the largest data set in the world for analysis of consumer preferences and behavior. China's "smart cities," the first large-scale 5G application, will match tens of millions of riders and packages to the location of vehicles, drastically cutting the waiting time for personal transportation and package deliveries.
As I report in my book, Scanlan explained what AI would do for manufacturing. "Let's take robotics today," he told me. "5G changes everything. Typically, 5G is spoken about in terms of download speed, but that's not the most important advantage. For industrial processes, autonomous vehicles and other applications, the latency—the time it takes for one device to acquire and respond to a signal from another device—is more important. On a factory floor today, Robot A does its instruction, passes the bit to Robot B, and it's the same thing. Now, if we put very low latency inside each of the robots—and they can be robots from different manufacturers—and put them in a room and give them the rules, like Go or like chess, to enable them to connect in real time—milliseconds, lightning fast—and then put a bit of plastic in view and say, I want you to make a plastic cup, the robots will organize themselves much better than we would have thought."
