China-US Trade Tensions: Expert: Trade friction may frustrate China's optical fibre growth
Updated 12:41, 01-Aug-2018
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Figures show China is the world's largest producer of optical fibre products, accounting for over 50 percent of the global market. With China's plans to further develop its 5G networks, production levels are expected to increase by three fold. But as CGTN's Li Jianhua reports, the demand for optical fibre will decrease if China's 5G industry development is affected in the ongoing trade friction with the US.
What you are looking at is the making of optical fibre preform, a core material in the manufacturing of optical fibre products that are widely used in telecommunications. As sophisticated as it may sound, it's actually relevant to whoever uses the internet. China is considered the world's largest producer and consumer of optical fibre products. Chief among them: Yangtze Optical Fibre and Cable. They're ranked first in global market share, around 55 percent worldwide but mostly centred in China.
ZHUANG DAN EXECUTIVE DIRECTOR, YANGTZE OPTICAL FIBRE AND CABLE "Chinese enterprises, mine included, would like to expand into overseas markets, and I believe it is necessary for Chinese companies to branch out. Yangtze Optical Fibre and Cable, over the past few years, has been investing in foreign markets under the China-proposed Belt and Road Initiative. Currently, our market shares overseas are about 11 to 12 percent."
As the US-China trade tensions escalated, Chinese authorities extended their anti-dumping duties on optical fibre preform from the US and Japan by another three years though China's imports of optical fibre preform stands at 20 percent. Zhuang said this is not impacting his company.
ZHUANG DAN EXECUTIVE DIRECTOR, YANGTZE OPTICAL FIBRE AND CABLE "Many Chinese companies, including ours, all have the core technologies, equipment and materials at our disposal. And because of this, technologies -- and material-wise, we can manage, despite the trade tensions. Therefore, the tensions are not affecting optical fibre production in China."
Chinese authorities vow to upgrade their 4G networks to 5G by 2020, which will increase the demand of optical fibre. Experts say the current US-China trade tensions are likely to deter the development of both.
PROFESSOR LIU CHUNSHENG CENTRAL UNIVERSITY OF FINANCE AND ECONOMICS "In the optical fibre industry, China does not rely on foreign resources, or the foreign markets. This means China can manage on its own, and in the short term, it is beneficial to China's optical fibre development. On the other hand, let's say, if some country takes some retaliatory measures, specifically to slow down China's plan to develop its 5G networks, the optical fibre and cable industry for sure will suffer."
Regardless, Chinese optical fibre producing companies are still in operation day and night.
LI JIANHUA WUHAN, HUBEI PROVINCE "Since 2009, China has witnessed rapid growth in optical fibre, which plays a key role in the country's plans to develop its 5G networks. But some experts are concerned the current US-China trade tensions are likely to disrupt China's optical fibre production. LJH, CGTN, WUHAN, HUBEI PROVINCE."