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5G Bad Answers

European countries won’t exclude themselves from China’s 5G networks

Cavanna, July 2019, https://tnsr.org/2019/07/unlocking-the-gates-of-eurasia-chinas-belt-and-road-initiative-and-its-implications-for-u-s-grand-strategy/, Thomas P. Cavanna is a visiting assistant professor at the Fletcher School of Law & Diplomacy in the Center for Strategic Studies. He writes on U.S. grand strategy and U.S. foreign policy toward China and South Asia. He holds a French “Agrégation” and a Master’s degree and doctorate in history from Sciences Po. He was also a Fox Fellow at Yale. Dr. Cavanna is currently working on a book on the Belt and Road Initiative and U.S. grand strategy., Unlocking the Gates of Eurasia: China’s Belt and Road Initiative and Its Implications for U.S. Grand Strategy

Despite severe U.S. pressures, many European countries are reluctant to exclude Chinese companies from their 5G networks.

Individual countries joining the BRI

Cavanna, July 2019, https://tnsr.org/2019/07/unlocking-the-gates-of-eurasia-chinas-belt-and-road-initiative-and-its-implications-for-u-s-grand-strategy/, Thomas P. Cavanna is a visiting assistant professor at the Fletcher School of Law & Diplomacy in the Center for Strategic Studies. He writes on U.S. grand strategy and U.S. foreign policy toward China and South Asia. He holds a French “Agrégation” and a Master’s degree and doctorate in history from Sciences Po. He was also a Fox Fellow at Yale. Dr. Cavanna is currently working on a book on the Belt and Road Initiative and U.S. grand strategy., Unlocking the Gates of Eurasia: China’s Belt and Road Initiative and Its Implications for U.S. Grand Strategy

Beijing’s leaders have also successfully approached some of the region’s smaller states on a bilateral basis, exploiting their economic hardships, rivalries, and resentment toward Brussels to divide and paralyze the European Union.203 Italy joined Belt and Road in March 2019, while Brexit prospects boosted the appeal of China’s market in Great Britain, where London’s financial elites have already begun their “rebalancing” toward East Asia and are assisting the Chinese initiative

Finally, despite expressing reservations, the European Union, Germany, and France themselves still intend to engage Beijing, including on Belt and Road.

. Meanwhile, prospects of transatlantic convergence are corroded by Trump’s hostility to multilateralism, free trade, environmental regulations, the Iran nuclear deal,

China needs to lead in AI, 5G, and green energy to boost productivity and stop the collapse of its economy

Knowledge Wharton, July 19, 2019, https://knowledge.wharton.upenn.edu/article/chinas-gdp-falling/, What’s Really Behind China’s Falling GDP?

The headlines grabbed attention: “China’s economy grows at slowest rate in nearly 30 years,” noted the Financial Times in a typical example. China’s GDP growth in the second quarter had slowed to 6.2%, the smallest gain since 1992, back when the country’s economy was first shifting into high gear. But the recent drop was not such a big fall from the 6.4% GDP growth rate of the first quarter, nor from the 6.6% rate for all of 2018. The big picture shows that China’s GDP has been falling for a number of years and the new number is just the latest in a series. And while some analysts were connecting the sluggish growth figure directly to the current trade spat with the U.S., that’s not the central problem, according to experts from Wharton and Stanford University. Rather, the challenges to China’s economy are deeper, structural, longer term, and have been building for years. They include over-investment, high savings and modest, if growing, consumer spending, high debt and low industrial productivity. Those are the views of Wharton emeritus management professor Marshall W. Meyer, a longtime China expert, and Richard Dasher, director of the U.S.-Asia Technology Management Center at Stanford. Overcoming those problems requires big shifts in how the country’s economy is organized, an overhaul the government is attempting to execute. “The tariffs and trade friction with the U.S. is a relatively small part of what is going on,” notes Dasher. Less Export-dependent One reason the current head-butting on trade issues between President Trump and China’s President Xi Jinping is not deeply affecting China: Net exports as a percentage of China’s economy have shrunk sharply for years and now are under 1% of total GDP. And Dasher says that China’s exports to the U.S. make up just 5% of total exports. So while China’s U.S. exports fell 7.8% in June, the result is not exactly a death blow to the nation’s $13.6 trillion economy. More generally, the graph of China’s economic growth has sloped downward since 2009, Meyer notes. The last quarter’s number was related to internal problems. Three of the most important in his view are the following: (1) demographics, “China is getting older” and the workforce is beginning to shrink; (2) “regression to the mean” – countries that grow quickly “almost always encounter … very rapid deceleration in growth at some point;” and (3) “excessive reliance on capital investment,” particularly in infrastructure. “The tariffs and trade friction with the U.S. is a relatively small part of what is going on.” –Richard Dasher Added to overspending on infrastructure, China also is boosting consumer and industrial spending by expanding available credit, Dasher says. “They are really very debt-ridden.” He found it interesting that financial markets did not react “too unfavorably” to the very low GDP growth rate “because consumer spending is up over 9% (in part due to recent tax cuts). And industrial investments are higher than GDP growth. The only way you can do that is through extending more credit.” And officials have done that by giving banks a lot of funds to lend out. [email protected] HIGH SCHOOL Dasher and Meyer offered their comments on the [email protected] radio show on SiriusXM. (Listen to the podcast at the top of this page.) But the most fundamental — and crucial — issue for China’s economic future is lagging productivity, according to Meyer. Productivity – “the amount of output we get per level of input” – is the most important driver of GDP in the long run for every economy and it has been low in China. In most industrial sectors, “some economists say it has been negative since as early as 2007. And certainly, I would say with a little more certainty since, say, 2012, 2013.” In the meantime, the country has been piling up debt – by consumers and local governments in particular. “Who’s going to repay that debt? No one knows,” Meyer says. To repay it China will have to increase productivity, which almost certainly means moving up the value chain into “leading-edge industries.” Related to that, China analysts have long said that the nation must move from investment-led growth to consumption-led growth as a way to avoid the so-called middle-income trap. Racing Towards Innovation And China has to try to do this rapidly. The list of industries it is hotly pursuing and that fit the bill run from “green energy to artificial intelligence to 5G and beyond,” Meyer explained. China is in a race to get a foothold in industries “where productivity will increase” in time to pay off its mountain of accumulating debt.

China powers 15% of the global economy and 35% of its growth

Elizabeth Economy, Council on Foreign Relations, 2018, The Third Revolution:: Xi Jinping and the New Chinese State,

By most any measure, China today is a global power. It is the world’s first- or second-largest economy after the United States (depending on whether the economy is calculated in nominal or purchasing power parity terms), contributing 15 percent of global GDP in 20153 and 35 percent of global GDP growth during 2010‒2015.4 It exports its goods, capital, and labor around the world, earning the title of the world’s largest trading power. It is also a significant and rising source of foreign direct investment (FDI), seeking natural resources to fuel the development of its industry and infrastructure and increasingly the technology and expertise that it believes will help raise its economy to the next level. Economy, Elizabeth C.. The Third Revolution (pp. 186-187). Oxford University Press. Kindle Edition.

Slowing China’s growth causes global poverty

The vigorous global economic growth in China and other nations that fueled the gains against poverty over the past 2½ decades has slowed, affecting particularly sub-Saharan Africa, which is home to about half of the world’s poorest people. “A reduction in poverty between now and 2030 does depend on that growth,” and not only redistribution of wealth, said Angus Deaton, a Nobel-winning economist at Princeton University who is an expert in inequality and poverty. While sub-Saharan Africa has made strides economically over the past several years, trade is slowing now with China, its biggest trading partner. Declines in the price of oil, iron ore, agricultural products and other such goods are hampering growth for African countries such as Nigeria and Angola, which are major commodity exporters.

Global poverty causes death

Barkan ‘11 Steven Barkan is a Professor and Chair of the Sociology department at the University of Maine. From: Sociology: Understanding and Changing the Social World, Comprehensive Edition v. 1.0 – available at: https://saylordotorg.github.io/text_sociology-understanding-and-changing-the-social-world-comprehensive-edition/s12-02-the-impact-of-global-poverty.html

Behind all the numbers for poverty and inequality presented in the preceding pages are the lives of more than 1.4 billion desperately poor people across the world who live in some of the worst conditions possible. AIDS, malaria, starvation, and other deadly diseases are common. Many children die before reaching adolescence, and many adults die before reaching what in the richest nations would be considered middle age. Many people in the poorest nations are illiterate, and a college education remains as foreign to them as their way of life would be to us. Occasionally, we see the world’s poor in TV news reports or in film documentaries before they fade quickly from our minds. Meanwhile, millions of people on our planet die every year because they do not have enough to eat, because they lack access to clean water or adequate sanitation, or because they lack access to medicine that is found in every CVS, Rite Aid, and Walgreens in the United States. As noted earlier, the United Nations Development Programme, the World Bank, and other international agencies issue annual reports on human development indicators that show the impact of living in a poor nation. This section begins with a look at some of the most important of these indicators. The status of a nation’s health is commonly considered perhaps the most important indicator of human development. When we look around the world, we see that global poverty is literally a matter of life and death. The clearest evidence of this fact comes from data on life expectancy, the average number of years that a nation’s citizens can be expected to live. Life expectancy certainly differs within each nation, with some people dying younger and others dying older, but poverty and related conditions affect a nation’s overall life expectancy to a startling degree. A map of global life expectancy appears in Figure 9.7 “Average Life Expectancy Across the Globe (Years)”. Life expectancy is highest in North America, Western Europe, and certain other regions of the world and lowest in Africa and South Asia, where life expectancy in many nations is some 30 years shorter than in other regions. Another way of visualizing the relationship between global poverty and life expectancy appears in Figure 9.8 “Global Stratification and Life Expectancy, 2006”, which depicts average life expectancy for wealthy nations, upper-middle-income nations, lower-middle-income nations, and poor nations. Men in wealthy nations can expect to live 76 years on average, compared to only 56 in poor nations; women in wealthy nations can expect to live 82 years, compared to only 58 in poor nations. Life expectancy in poor nations is thus 20 and 24 years lower, respectively, for the two sexes.

Non-unique; Philippines, a US ally, joining 5G

Niharika Mandhana, July 15, 2019, https://www.wsj.com/articles/in-global-tech-battle-the-philippines-has-chosen-sides-not-the-u-s-11563205891, In Global Tech Battle, a Balky U.S. Ally Chooses China

MANILA—The U.S.-China technology war is raging around the world, but the Philippines is no longer torn. It is binding its telecommunications future to China’s. The country got its first taste of next-generation 5G services in late June with gear supplied by Huawei Technologies Co. This month, a new carrier backed by state-owned China Telecommunications Corp. will begin rolling out a network largely designed in China, to be executed by Chinese engineers in the Philippines. The moves are a blow to the U.S., which has in recent months pushed allies to shun Huawei. U.S. officials contend Chinese companies could be compelled to conduct espionage for Beijing. As countries like the Philippines reject pressure from Washington, Chinese companies are embedding themselves deep in strategically important infrastructure. These developments tie countries to Beijing through a new wave of technology that promises to reshape society, from economic growth to military planning. Huawei, which has repeatedly said it wouldn’t spy for China, estimates its 5G equipment will spread across more than 130 countries, including in Europe. Huawei’s 5G system is up and running in South Korea and will be deploying in the United Arab Emirates this year. Both countries are U.S. allies. Chinese companies’ dominant presence in Philippine telecom networks stands to move the Southeast Asian country further away from the U.S., its treaty ally—testing a relationship that has already grown strained.

Non-unique – Other countries, including US allies, are taking up 5G

Nikkei Asia Review, July 20, 2019, Fears of ‘digital iron curtain’ spread as US and China dig in

The fear is that a tech cold war, splitting the world into China- and U.S.-led spheres, could end the benefits that have come from having global standards for components. But it is far from clear how these divisions would be drawn. For a start, the attitudes of Asian nations located in the area covered by China’s Belt and Road are not as predictable as Washington may have expected. “Huawei’s research is far bigger than Malaysia’s capability. We try to make use of their technology as much as possible,” Malaysian Prime Minister Mahathir Mohamad said in his address to the annual Future of Asia conference hosted by Nikkei in Tokyo in late May Pichet Durongkaveroj, Thailand’s minister of digital economy and society, told the conference that the country would not join the camp to exclude Huawei, saying, “Bangkok is friendly to players of all countries. Other Southeast Asian countries are also unlikely to side with the U.S. in shutting out Huawei. Even South Korea, an ally of the U.S., has not clarified its stance, possibly because of pressure from China. Asia, therefore, is not as clear-cut as the U.S may have thought.

UAE using China’s 5G

M.K Bradkaumer, July 23, 2019, Belt and Road Takes a Leap Forward to the Gulf, https://www.newsclick.in/belt-road-takes-leap-forward-gulftion

Interestingly, UAE-based telecom operator Etisalat becomes the first in the Middle East and North Africa to commercially launch 5G service and the device in the UAE last month, following a tie-up with Chinese smartphone manufacturer ZTE to offer the service. The UAE publicly announced as early as in February that it would use equipment from the Chinese technology giant Huawei to build a new high-speed wireless network, despite pressure from the United States…. On the other hand, the UAE has presented itself as a hub for China’s Belt and Road in the Middle East and North Africa and is an early customer of Huawei’s 5G, notwithstanding the US’ robust opposition to both. No doubt, Sheikh Zayed’s visit signifies a strategic defiance of the US’ containment strategy toward China.

Huawei still dominant world-wide

Michael Shuman, April 25, 2019, https://www.theatlantic.com/international/archive/2019/04/us-allies-washington-china-belt-road/587902/, The Atlantic, The U.S. Can’t Make Allies Take Sides Over China

The U.S. is not having much success in other points of conflict with China, either. Washington is on a strident campaign to persuade its allies to bar telecommunications equipment made by China’s Huawei Technologies, claiming that its gear presents a security threat. Some traditional allies share that fear; Australia and New Zealand have banned Huawei from building their next-generation mobile-data networks, and the United Kingdom is leaning that way too. But Huawei is hardly a company on the ropes. According to its latest annual report, Huawei’s revenue in 2018 jumped nearly 20 percent from last year, to $105 billion. The company ranked third in the global smartphone market in 2018, just behind Apple, according to the research firm Strategy Analytics.