Moves (Page 75)

The recent launch of the Huawei Mate60 Pro sent a seismic shiver across the global semiconductor realm. Several years of the most drastic sanctions, culminating last year in the US CHIPS and Science Act, had failed to stop China’s technological juggernaut.

On the contrary! A cryptic Chinese poem expresses the struggle: 两岸猿声啼不住, 轻舟已过万重山 – the boat has sailed past the looming mountains with their screeching baboons. 

The Huawei Mate60 Pro is a masterful move in an unfolding global chess game. But there is much more coming.

Let’s look at the big picture.

Think back to the 2008 Beijing Olympics Opening Ceremony. China spared no expense in staging a magnificent show combining artistry and technology that narrated the trajectory of Chinese culture and civilization, from its ancient origins to the boundless potential of its high-tech future. Synchronicity and power on a breathtaking scale.

Many were ecstatic. But while the Beijing show impressed most of the world, it sent shivers down the spines of some Western elites, who were more and more terrified about China’s growing power and self-confidence.

Wheels were set in motion to slow down the Chinese juggernaut’s advance at all costs, even if it meant damaging the synergistic partnership between the West and China, which had brought enormous growth and profitability for both.

This is where I think each side made a fatal misjudgment, by projecting their own ideology on the other side.

Instinctively the West thought: “Surely when China attains the means, it will act like we would do, seeking hegemony and aiming to deal a death blow to its waning rival.” Seeing China as an existential threat, the West launched a ferocious, full-spectrum attack.

China bet erroneously that the West would act pragmatically, as China would do, and not try to kill the proverbial goose that lays golden eggs. After all, China is the biggest buyer of Western debt ($4 trillion in US Treasuries since the 2008 financial crisis), a huge market for high-value-added goods and services from the West, a manufacturing partner that enabled brands like Apple and Tesla to become global behemoths.

China was fully integrated into the supply chain of Western companies; hardly anything could be produced without inputs from China. 

‘Winner takes all’ strategy

China was therefore caught completely off guard by the series of exclusionary measures launched under the Barack Obama administration – including the Trans-Pacific Partnership (TPP) – and culminating in outright trade and technology sanctions, siege and wars orchestrated by Donald Trump, and expanded and intensified under the Joe Biden administration. 

It became a zero-sum game on The Grand Chessboard, as Zbigniew Brzezinski called it in his famous book.

Based on game theory and a ruthless “winner takes all” approach, think-tanks across the West devised ever stronger decoupling measures and punitive sanctions on a rapidly expanding “Entity List.” 

It was supposed to be a checkmate move. In a July 12, 2023, article in New York Times Magazine titled “’An Act of War’: Inside America’s Silicon Blockade Against China,” Alex W Palmer declared: “If the controls are successful, they could handicap China for a generation; if they fail, they may backfire spectacularly, hastening the very future the United States is trying desperately to avoid.”

How do the Chinese fight a zero-sum game? With Chinese math! 

In the Chinese martial art xingyiquan, one keeps a reserve strength of at least 70% on the back foot, displaying only 30% of one’s true strength in punching the opponent. The remaining 70% are reserves to be drawn on as the attacks intensify. The depth of this reservoir often catches the opponent by surprise. 

The Chinese cannot understand why the West fights with what they call a “Fist of Seven Injuries” (七伤拳), inflicting as much self-harm as it does to the opponent. The sanctions have hurt Western and Eastern Asian high-tech companies hard, as they lose not only their biggest market, but also important partners in their supply chain.

Profits plunged by double digits among tech titans from Samsung to Qualcomm. From mid-2022 to July 2023, Samsung’s operating profit fell by a whopping 95% to US$527.2 million (670 billion won). TSMC (Taiwan Semiconductor Manufacturing Co) reported a 23.3% year-over-year decline in net income – the first profit drop in four years.

China ‘Goes’ for broke

Seeing how the game was playing out on the Grand Chessboard after 2008, China imperceptibly began to switch the game from chess to weiqi (围棋) – the Game of Encirclement, otherwise known as Go.

In their book A Thousand Plateaus (1980), Gilles Deleuze and Félix Guattari offered a succinct explication of the difference between the two games. They note that in chess the conflict is “institutionalized and regulated” with a front and a rear battle line, whereas in weiqi there are no battle lines. “It is a question of arraying oneself in an open space,” they note, “of holding space, of maintaining the possibility of springing up at any point.”

Chess is played in a “structured” space, with each piece assigned a specific role in the hierarchy with a clear differentiation between the pawns and the “elite” pieces such as knights, bishops, kings and queens, each moving in its designated way.

In contrast, weiqi is played in a “fluid” space where the pieces are identical, and their roles are ambiguous. It is the strategic context that matters. The strategic orchestration of the whole is greater than the sum of its parts. 

There are as many moves in weiqi as atoms in the observable universe, offering infinite flexibility and maneuvering room to an astute player. The ambiguousness and fluidity of their roles augment the potential importance of every piece on the board, bewildering those who do not understand the weiqi game. 

China plays weiqi by radically expanding its playing field and its global political-economic space. 

China’s mobilization began in earnest, across the whole board. 

Misreading China

It is a fatal mistake to view China as a sea of identical faces. Every Chinese person is in fact a monad, an individual microcosm, a bundle of energy, deeply interconnected with the macrocosm. 

With their constant harping on China’s “authoritarianism,” the Western media erroneously ascribed a fossilized top-down model to this elastic, evolving system.

Today’s China thinks in multidimensional feedback loops, meritocracy, distributed control, complexity, emergence, networks, manufacturing chain reactions, AI, Big Data, quantum technologies, synergy, Hive Intelligence. 

There is a Chinese expression, 举国之力, literally “the strength of a nation.” But its full meaning is hard to translate. 

In terms of infrastructure, security, from health care to education, Chinese people place high demands on their government to deliver. But when the call comes to mobilize in the face of an outside threat, the role is reversed. “The country needs you,” was the message. Under the mortal threat of the Tech War, a billion monads sprang into action. 

It wasn’t just a directive from Beijing and planning by top players like Huawei. Students voluntarily switched their graduate studies from other sciences to information and communications technology (ICT). Rival companies set aside differences to cooperate.

Tech war in multipolar world

A turbo chain reaction propagated across the monadic space, from R&D to a complete ICT supply chain, not only in Shenzhen, Shanghai and Beijing, but Anhui, Hefei, Harbin, Xian, Wuxi, Changsha, China’s microcosms coalescing into mission-driven cells and divisions, each taking on specific challenges within the macrocosm. 

Huawei, SMIC, SMEE, YMTC, ZTE etc are just the most visible tip of the iceberg. A plethora of lesser-known brands such as Origin Quantum, JCET, AMEC, Changchun Institute of Optics, CHEER Tech, etc, many of which had nearly gone out of existence, suddenly reappeared on the scene.

Would it have happened without an all-out tech war against China? 

No. 

China had always viewed chips as ordinary electronic products and as long as it could rely on a steady supply, there would be little interest in reinventing the wheel. Huawei had a huge reserve of strength and could have punched sooner – 10+ years sooner for a number of technologies.

Nevertheless, under the leadership of chief executive officer Ren Zhengfei, Huawei remained a steadfast customer for its partners such as Qualcomm, TSMC, SK Hynix, ARM, etc, emphasizing the need to preserve the global ecology of this sector. 

The High Tech War has changed all this.

This difference is key to understanding the outcome of this High Tech War. The issue is not merely Huawei’s Mate60 Pro smartphone, but rather that China is creating an entire perfectly networked universe, of which only the tip is visible.

The chessboard has morphed into today’s weiqi game, with 70% of the world on joining China, in the form of BRICS and the angiogenic growth of BRI investments, both physical and virtual.

Huawei chief financial officer Meng Wanzhou (Sabrina Meng) strongly hinted at this during September 20-22 Huawei Connect 2023 Conference. Protocols are being negotiated and a global nexus of next-wave technology – with customized security and decentralized control – is being stitched together.

This sets the stage for a full spectrum of AI-aided products and services for consumers (2C), but more importantly for businesses (2B), industries, agriculture and infrastructure, all plugged into the same backbone. 

The very formation of a complete Chinese semiconductor supply chain nearly from scratch demonstrates how the backbone described by Huawei is already working.

Who else would be able to mobilize so swiftly, to create a competitive global 6G nexus?

And China hasn’t even begun to fight back.

What does this paradigm shift mean for of Brzezinski’s Game Theory? It means that the West must get out of its boxed-in zero-sum thinking and join the new, expanding multipolar world.

With its multiplicities, this multipolar world realizes the great principle 海纳百川 – the Greatness of the Ocean lies in its embracing hundreds of diverse rivers and streams into its generous, unfathomable, perpetual vastness. 

Continue Reading