Is Phytium owned by the Chinese government? Otherwise, why call it China's chip? It's like saying America's Xeon.
This is a situation where free trade and national security can be in conflict -- it would simply be irresponsible for the US or China to trust non-domestic companies with military projects, satellites, etc. But most of the companies that work on those projects also compete in the consumer market, where government subsidies are considered trade barriers.
I'm sorry but this is not true.
Chinese companies are often a direct part of national strategy and are created by, led by, supported by and defended by the state.
The collusion between many Chinese companies often goes far, far beyond 'government contracts'.
It's rational for any government to prefer local companies for strategic purchases, particularly military etc.. Nobody is going to bat an eye if a state related carrier choses to buy planes from their national aerospace entity.
But China will force companies from other countries to give up their IP - then hand it over to state-owned or related companies, then 'hold up' the foreign company in approval processes and other forms of tariff barriers - while the 'state owned' company gets a head start in the local market.
And obviously having direct government ownership in many of these companies means a material intervention far beyond what the US does. The US does not own any piece of Apple or Intel, and makes investments in entities like GM only very reluctantly under negative conditions to keep them alive - not to promote a national strategy.
Finally - because of the heavy state owned banking system and the total political control over monetary policy - issues like lending and financing are also heavily politicized, which is another form of direct state intervention.
The means by which the US or UK intervene are on average completely different from how it's often done in China.
But it goes against an emotional kind of a 'morally relativistic' view of other cultures one must have to be politically correct.
A statement that is 'against China', even if factual, will be perceived as some kind of 'bigotry' or 'prejudice' or 'racist sentiment' by those with a social/utopian view of the world.
I find young people are especially like this.
But hey, feel free to have a persecution complex about this whole thing, and blame political correctness and moral relativism.
Totally false. I iterated several ways in which the Chinese government intervenes that the US and other countries do not.
In case you had trouble reading:
1) The Chinese government creates many companies companies for strategic purposes. The US does not. Some Euro companies do, in limited situations - mostly around energy, military and aviation.
2) The Chinese government takes a direct financial interest in many industries and companies. The US does not, again, unless it's a reluctant, temporary bailout which is a totally different thing. Even when they do 'bail out' - they don't sit on the board, or give orders - it's just financial.
3) The Chinese government owns the banking system - and government officials require state banks to make investments in specific companies. The US does not do this.
4) The Chinese government has political control over their 'Central Bank' and has currency and capital controls. They use these measures for a lot of things - but one is to create financing for the state banks to make their industrial investments. The US does not do this.
5) The Chinese government requires foreign entities to give up Intellectual Property in order to sell into their market - even for consumer products etc. The US does not do this.
6) The Chinese government uses IP gained from this practice - and from industrial espionage to create state-owned competitors. The US does not do this. (There's little for the US to steal, admittedly, they will do this for military programs - but not commercial ventures).
You must had difficulty reading?
I totally contradicted your comment.
The means by which China intervenes is fundamentally different than the means by which the US and Western countries intervene.
Everybody knows this.
It's not contentious, it's not a secret, it's not a conspiracy theory.
You're arguing against everyone in business.
I'll gather that most Hackernews readers have basically no exposure to these things - that's ok - it's 'hackernews' not 'international business news'.
> 1) The Chinese government creates many companies companies for strategic purposes. The US does not. Some Euro companies do, in limited situations - mostly around energy, military and aviation.
This is a distiction without a difference. As you said, some European countries do this too. The US has done so also in the past. Even though it does not do so today, that doesn't really change the outcome -- US defense companies are not state-owned, but they promote the state's strategy and interest just as much as they would if they were state-owned. They also get a lot of money from the state, probably far more than any state-owned Chinese companies get.
> 2) The Chinese government takes a direct financial interest in many industries and companies. The US does not, again, unless it's a reluctant, temporary bailout which is a totally different thing. Even when they do 'bail out' - they don't sit on the board, or give orders - it's just financial.
This is another distinction without a difference. The Chinese have influence on companies by taking a direct financial interest, but that's not the only way it can be done. The US has just as much influence on a lot of US companies, and implements its financial interest through government contracts rather than direct investment. These are simply different ways of achieving the same outcome.
> 3) The Chinese government owns the banking system - and government officials require state banks to make investments in specific companies. The US does not do this. 4) The Chinese government has political control over their 'Central Bank' and has currency and capital controls. They use these measures for a lot of things - but one is to create financing for the state banks to make their industrial investments. The US does not do this.
Again, ownership is not required for influence to exist. Anyone who lived through 2008 and TARP in the US cannot possibly claim there is no political influence in the banking system. Yeah, the Chinese do it more than the US does -- but that is a difference of degree.
Your point #5 is factually incorrect. There are problems with Chinese IP law to be sure, but there is not a legal requirement to give up IP rights to do business in China. Companies that register their IP in China are entitled to legal protections, just as they would be in the US. If those protections are not enforced, that's a difference of degree, not of kind.
> 6) The Chinese government uses IP gained from this practice - and from industrial espionage to create state-owned competitors. The US does not do this. (There's little for the US to steal, admittedly, they will do this for military programs - but not commercial ventures).
I'm sure the US does this, and you admitted as much when you said they do this for military programs. Companies with military contracts overlap into the commercial and consumer space quite a bit, so it does affect the commercial market. Yeah, China does more of this -- but that is a difference of degree.
The bottom line is that when both countries do a thing, and one of the countries does more of that thing than the other country, that's a difference of degree.
You seem rather attached to state ownership as some kind of differentiating feature, but it's really not. China exerts influence by ownership and direct investment; the US exerts influence via government contracts, which are a form of indirect investment. The outcome is the same kind of thing -- government influence over companies. China does it more, which is a difference in degree.
You have not identified any fundamental differences here. All you've done is show that China does the same things the US does, but more, and possibly more effectively.
Yes - it is - dude.
Buddy - I'm not arguing wit you.
I'm not trying to make a point.
This is well established stuff.
There is no debate here.
You've painted yourself into a corner, saying that 'night is day'.
You're making a fool of yourself.
Phytium is a subsidiary of China Electronics Corporation which itself is a state-owned enterprise.