The End of the Global Unified Economic System: The Breakdown of Technology

In light of the economic repercussions of the spread of the Corona virus in the world, news about the Sino-US trade war, its development and the extent of its reflection in global value chains and the future of technology has been missed. . This war took multiple dimensions, especially the sanctions on the Chinese technology sector. Last May, the US Department of Commerce issued a decision to force all companies using American technology in the semiconductor industry to obtain a license from the ministry before exporting their products to the Chinese company Huawei. Semiconductors are an essential element in electronic chip manufacturing, which means the main goal is to prevent Huawei from sourcing or even manufacturing the latest chips, noting that Huawei’s suppliers were previously able to circumvent similar US decisions.

Smart sanctions
There is no doubt that the sanctions against “Huawei” indicate that the target is the entire Chinese information and communications technology sector, so the main concern is the Chinese state, given the possibility that the sanctions will be extended to all sectors. These sanctions are not new, but they began in 2018 with a clear goal: to stop China’s expansion in the ICT sector. The solution may be for China to start manufacturing its own chips, but this is not an easy task and the results are not guaranteed either. If China embarks on this mission, it is supposed to establish its own chip production lines free of American technology or the technology of countries that revolve around the United States. Here is the difficulty of the task. The most difficult problem is to replace the EUV Extreme Ultraviolet Drilling System (EUV) produced by the Dutch company ASML that is used to carve slides, which has committed to banning Huawei since 2019. China is working to develop such a system , and this cannot happen overnight. Also, its cost will not be low. In return, manufacturing this product locally gives China and Chinese companies more control over production lines and the ability to develop modern segments without the need for American technology to modernize existing production lines.

However, even if China could solve the machine problem, it would still have a problem of another kind, as the manufacture of newer chips and the development of this process require its own EDA (Electronic Design Automation Tools) tools. The market for these tools, which can be divided into five main subcategories: design, simulation, verification, manufacturing configuration and functional safety, is dominated by three American companies. While he doubts that “Huawei” is working on developing its own “EDA” toolkit, it is unclear how far it has progressed in this endeavor. EDA tools are software tools used to design integrated circuits and printed circuit boards. They are necessary tools to perform various tasks in the design, verification and correction of semiconductor chips. This is complicated and cannot be done manually, as modern designs can contain tens of billions of transistors.
Even if China manages to solve this decade and catch up with Western technology, the path to pure Chinese chip production will not become a pavement for its companies. The matter requires a basic and fundamental step related to the selection of so-called “chip architectures”. Such a move can change the way of communication and technological integration, since the architectures will impose a specific path in the lines of technological production in China. It depends on the nature of these architectures that are necessary to make a CPU. This process is based on the selection of an architectural instruction set (ISA), whose tasks are to provide commands to the processor and to link the program to the computer. The problem is that programs designed for a specific architecture may not work on a different one without emulators.
It is true that China, since the arrival of President Xi to power, has focused on developing a manufacturing policy rather than buying, but it has been based on the purchase of intellectual properties in the field of chip architectures, and most of properties are registered in the name of companies using US EDA tools For example, UK company ARM cannot continue to sell its intellectual property rights to “Huawei” due to use of US “EDA” tools in design of its architecture. The problem is further complicated by looking at architecture classes. There are “faster CISC architectures” and “more energy efficient RISC architectures”. Traditionally, server manufacturing required CISC performance due to its speed. When it comes to the manufacturing process for a phone, RISC can be satisfied. Herein lies the Chinese problem. The world is moving to make chips based on RISC architectures that are mostly protected by intellectual property through ARM and MIPS, while RISC-V is an open source architecture (without intellectual property) that is still very popular.
Technological fork
So what is driving the trend to consider a Chinese architecture manufacturing type movement that could change the way of communication and technology integration in the world? The answer lies in the following: the choice of the kernel and the architecture that the manufacturer will use will require that the CPU have a specific system of architecture, which includes compatible tools, applications and middleware. Therefore, it can be difficult to change if the development team is already used to a particular “system” (or environment). In light of the continuation of the current and expected ban on the Chinese telecommunications and information technology sector, China will be forced to use limited broadcast RISC-V architectures and a limited “system”. This means that Chinese technology will not be able to integrate with Western technology without simulation programs (which may be using American technology and may also be subject to embargoes).
Most experts familiar with the development path of the Chinese tech sectors and those following the path of US sanctions and embargoes believe that the technology division can create separate communication platforms and other high-tech systems, increasing this possibility is the Chinese reaction to the US sanctions. In a study entitled “Technology, power and uncontrolled strategic competition between great powers between China and the United States”, Xianjin Wu believes that there is a growing concern due to the Chinese reaction that crystallized through the plan “Chinese Standards 2035”, which has as aim to influence the work of the next generation of technology. Telecommunication to artificial intelligence. This will form the framework for the future development of this technology. Wu believes that politics and ideology have replaced positive thinking, while the United States is pushing in the direction of stopping China’s momentum in technological innovation by dividing global value chains for security purposes, as well as exacerbating the concepts. mutual misconceptions between Chinese and US governments and societies.

The world will have two options: continue to use Western technology focused on American innovation at high cost, or use cheap Chinese innovation technology that cannot be integrated with Western systems without American permission.

In practice, what the United States is doing is uniting the countries and peoples of the world between two options:
– Continue to use Western technology focused on American innovation at high costs that may result from the Chinese reaction, which will eventually lead to the expulsion of Western companies from the paradise of cheap and high-end manufacturing in China (Amer Mohsen explains the advantages not reproducible models of the manufacturing model in China and the many challenges faced by the transfer of production (Western companies abroad).
The choice to use Eastern technology focused on Chinese innovation, which will not be able to integrate with Western technology systems without the permission of the United States, but at the same time is cheap and suitable for the capabilities of the world’s low and middle income people. This choice is part of a broader American trend that has become clear to the world to choose between the United States and China. Between staying in the paradise of the dollar and the global economic system, or leaving it and bearing the financial and security costs of going to the other side after the color gray disappeared from the American dictionary. This American policy has been increased after the consequences of the spread of the Corona virus. China was the fastest to get out of it and its economy was one of the first to start recovering at higher rates than expected. Pending the crystallization of the result of Chinese efforts to catch up with Western technology, the world will witness the consequences of a severe American war that drives countries away from China. If China manages to close the technology gap, the global economic system will begin to fragment with the emergence of two technology platforms (Western and Eastern), each of which imposes its own value chains that push towards a clear positioning within a system without the other.

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