Huawei blacklist and its impact on global supply chains
Andy Mok
Editor's Note: Andy Mok is a research fellow at the Center for China and Globalization. The article reflects the author's opinion, and not necessarily the views of CGTN.
To be part of a community, whether that is a family, a sports team, a company or the community of nations, requires adherence to the norms and rules of that community. A commitment to fairness is also necessary for any community to thrive or even survive.
The recent placing of Huawei on the Department of Commerce's entity list is not consistent with these principles. As such, it is not only a dramatic escalation in the U.S.' attack against China but also represents a threat to the stability and prosperity of the world at large.
By prohibiting American companies from providing hardware components, software and other supplies to Huawei, the United States is weaponizing the global supply chain. These supply chains have enabled a new era of global economic growth and social development by making a cornucopia of new products available to consumers around the world. For example, through gains from specialization, companies like Oppo and Vivo can effectively offer affordable but advanced smartphones without having to develop all the necessary technologies and components in-house. This has accelerated the rate of innovation and raised standards of living and ushered in hitherto unimagined conveniences and efficiencies for those in the developed and developing world alike.
A man takes a picture of an Honor 20 Pro smartphone at a launch event for the Honor 20 Series smartphones at Battersea Evolution in London, May 21, 2019. /VCG Photo

A man takes a picture of an Honor 20 Pro smartphone at a launch event for the Honor 20 Series smartphones at Battersea Evolution in London, May 21, 2019. /VCG Photo

But the United States has put this all at risk in pursuit of a narrow and self-serving goal with this extreme action. While the damage to Chinese companies like Huawei is the easiest to see, the effect on the reliability of global supply chains is less apparent but much more damaging to global prosperity. First, many companies may now hesitate to design products or processes that take advantage of this ecosystem. Next, these aggressive actions may prompt retaliation from other countries that can lead to a tit-for-tat downward spiral which would demolish the infrastructure of global manufacturing which took decades to build.
The blacklisting of Huawei is also imposing enormous immediate and tangible collateral damage. Tens of millions of people around the world depend on connectivity provided by Huawei devices to power their professional and personal lives. Without the ability to use the communications and productivity software that complement these devices, they will at the very least experience a meaningful degree of inconvenience, and in an increasingly fast-paced world where time is money, this is no small thing.
Also, the suppliers of Huawei are being hurt. These companies are not just Chinese but also European and American. Many are also publicly listed, which means their investors are also paying the price for the government's aggression. It's noteworthy that many investors are ordinary Americans who rely on these investments to provide a secure retirement and this may create a political backlash the U.S. government did not anticipate.
Finally, this may end up undermining the dominance of the American companies producing the chips, other components and software that currently enjoy a monopolistic position in the global market which would be the precise opposite of the government's stated goal of promoting American economic strength.
Google applications are seen on a Huawei smartphone in this photo taken on May 20, 2019. /VCG Photo

Google applications are seen on a Huawei smartphone in this photo taken on May 20, 2019. /VCG Photo

For students of American military history, this blacklisting is reminiscent of the U.S. bombing of Ben Tre during the disastrous Vietnam War, which the military justified by claiming, “We had to destroy the town in order to save it.” Similarly, the U.S. seems bent on destroying the global supply chain driven by the delusion that it is saving it.
Why does the U.S. engage in behavior like this? A recent Telesur article captured President Jimmy Carter's talk where he noted the U.S. has been at peace for only 16 of its 242 years as a nation and called it “the most warlike nation in the history of the world,” which was a result of the U.S. forcing other countries to “adopt our American principles.”
Ray Dalio, the founder of Bridgewater Associates, made a similar observation in a LinkedIn article, "the Western approach to fighting tends to be more like animals do via exchanging harmful blows, hurting both, until one submits to the other.”
However, what allowed humans to flourish is their ability to civilize themselves by finding ways to resolve conflicts and settle differences without violence, intimidation or other threats. This is something the U.S. has shown it is incapable of, which makes it a threat not only to China but all others who must share the planet with such a country.
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