It is quite apparent globally that U.S. President Donald Trump’s trade war with China (which was evidenced again in the very recently concluded G20 meeting in Osaka, Japan) is about a whole lot more than trade. It is an attempt to contain China’s rise and retain U.S. pre-eminence in not just Asia and the Pacific but in the world. China has replaced the erstwhile Soviet Union as the rival superpower to the U.S.
With regard to new technology development, the Silicon Valley and the Bay Area in California need to understand that today, R&D in high end technology and global production takes place in enmeshed networks, in which development of intellectual property, say, for a new generation of chips, could be taking place in the U.S. and India, while the chip’s fabrication could take place in Taiwan or Singapore and its integration into a gadget in China, along with other parts that are built in the elaborate supply chain nicknamed ‘Factory Asia’, in which bits and parts shuffle around East and Southeast Asia, adding value along the way, before ending up in China.
China is already weaning away from California and Silicon Valley in a big way since the last 24 months. Their investments in the California Bay area has drastically reduced since then. In addition to this, the U.S.'s denial of technology will accelerate, not stifle, this process. Denial of Qualcomm chips brought ZTE to its knees. This will spur the Chinese to build their own Qualcomm.
China's rise as an economic and military power is unstoppable. Western capital gains from this process more than western labor loses out. Trump's campaign to contain China will fail even if turbulence in the capital markets does not halt the project before long. China's R&D ecosystem has evolved to a level where it no longer needs to steal technology – China even imports Wedgwood pottery from England, whose roots lie in ceramics technology stolen from China centuries ago.
China leads the world in quantum communications, is heel-to-toe with the U.S. in artificial intelligence and racing ahead in digital technologies, unhindered by privacy concerns. The only other country today that can partially give steady technology business and selected investment to California is India.
Today India's needs for technology, communication has increased 10-fold. In the annual budget today, India has earmarked a huge amount for technology upgradation across all sectors of the growing Indian economy. If the cards are played well, the beneficiary could be California which should further their concentration into India going forward, as business from China is coming down at a fast pace.
Ramesh Kumar Nanjundaiya