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Tech-trade wars grow

26 Mar 2024

The trade war, based on technology products, between China and the USA continues to escalate.

After banning a number of Chinese companies such as Huawei, the US government also blocked the world's largest drone maker DJI from supplying drones to government agencies or federally funded oganisations and now it seeks a total ban of DJI gear as well as bans on Chinese made EVs.

In response, China has banned the export of key drone components to the USA and, just last week, announced that it is blocking the use of Intel and AMD processors in government computers.

It will be interesting to see just how far this "tit for tat" battle goes.

Both economies will be both harmed and boosted by these bans.

However, I suspect that both countries are already working on ways to sidestep what are primarily politically motivated restrictions.

For instance, two new drone companies have suddenly appeared out of nowhere and are selling drones to the USA that look suspiciously like the offerings of DJI. Both companies claim that they have absolutely no affiliation with DJI, nor are they a subsidiary or in any way connected to the Chinese drone giant.

However, close examination of the products clearly indicates that they are built to exactly the same design, use the same components and probably even come from the same factory. In one instance the manual is a word-for-word copy.

It it looks like a duck, walks like a duck and quacks like a duck, chances are...

For China to ban both Intel and AMD processors from its own government computers is an interesting step to take. It can really only mean one of two things:

Firstly, it could be that China is confident that it can build processors that are (almost) as good as those from these vendors and that should be a worry to its competitors in the West.

Alternatively, it might be that this is just a case of grandstanding and that the decree is simply for political purposes. In this case China will continue to use Intel and AMD-based computers within the halls of its government but they just won't tell anyone.

Personally, I suspect that the latter is the more likely.

It will be fascinating to see where this all ends up in five years' time.

However, on the subject of the world in five years... I've had several of my Europe-based friends express very real concern about the potential for WW3. It seems that, at least in the minds of some Europeans, the spectre of war is looming large right now.

I think those of us who live here in New Zealand ought to feel very lucky that we are so far away from what could become a real hotspot (perhaps literally). The only thing we'll have to worry about are the legions of politicians from both East and West who, once they've fired all their missiles, view this country as perhaps the safest (least dangerous) place to be on the face of the planet. Can we expect numerous Northern hemisphere leaders to descend upon us with their private armies, attempting to annex NZ and make it their own?

Food for thought perhaps.

Carpe Diem folks!

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