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China Gives US Tech the Silent Treatment (wsj.com) 53

Posted by msmash from the closer-look dept.
Patience may be a virtue. For U.S. tech companies looking to do deals that involve China, it is also an expensive necessity. From a report: Cisco Systems and Applied Materials each received different lessons on that score last week. On Friday, Cisco found its $2.6 billion deal to buy Acacia Communications in serious jeopardy after Acaia announced it was terminating the merger due to a lack of approval from Chinese regulators. Cisco's unusual response was that it did, in fact, receive the necessary approval, and it is now seeking a court mandate that would prevent the deal from being terminated. The deal was first struck in July 2019 and was Cisco's largest acquisition since its $3.7 billion pickup of AppDynamics more than two years prior.

Applied Materials took a different tack. The maker of semiconductor manufacturing gear earlier in the week announced in a regulatory filing that it has upped its price for Kokusai Electric to $3.5 billion from the $2.2 billion the two companies first agreed upon in June 2019. That deal is also only awaiting approval from Chinese regulators. With its higher price, Applied was able to extend the deadline to close the merger to March 19 from its original date of Dec. 30. Both cases are just the latest sign of soured trade relations between the U.S. and China. The departing Trump administration has continued to pursue aggressive actions, such as export controls on Chinese chipmaking giant SMIC and an order requiring the delisting of three Chinese telecommunications companies from the New York Stock Exchange.
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China Gives US Tech the Silent Treatment More

China Gives US Tech the Silent Treatment

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  • Trade prevents wars (Score:5, Insightful)

    by garyisabusyguy ( 732330 ) on Monday January 11, 2021 @04:30PM (#60928808)

    trumps anti-trade policies essentially sowed salt into the ground that trade grows from, it will take a while to get back to normal, and we may even see ugly conflicts before all countries come back to sanity

    Same thing happened leading into WW2 (Smoot-Hawley anybody), yet we cannot seem to learn form out mistakes

    This last week should have been the ultimate wake up call, or will the US just let the disease fester like Hitler's non-prosecution in 1922 did.

    • Re: (Score:2, Insightful)

      by lessSockMorePuppet ( 6778792 )

      All this one sided trade does is sell our economic base to a foreign superpower.

      One sided trade makes you weak. Do they buy our exports? Not really...

      • >Do they buy our exports? Not really...

        Oh hell yes they do. Why are US farmers so upset and requiring a taxpayer bailout to not lose the family farm? They are an important customer, we just buy even more from them because we have lots of money to spend and are the third most populous country on earth.

        Don't get me wrong though, the US has to fix trade problems with China. Unfortunately, Mr. Art of The Deal has made a bad situation worse but that era is coming to a close with a bang.

      • Re: (Score:1)

        by Tablizer ( 95088 )

        One sided trade makes you weak. Do they buy our exports? Not really...

        As seen through economic simulations, that's not necessarily true. However, the impact to different professions and classes can be very uneven, creating political turmoil. For one, it benefits the US rich at the expense of blue-collar workers.

        Another risk of lopsided trade is lack of alternative sources if there's a disruption. A spare tire may cost you vehicle weight, but is a god-send if you get a flat out in Snake Gulch. Wars, pandem

        • I'll take the present reality of China as the new global superpower and the rise of private trillionaires and megacorporations that can and do buy governments over your simulations.

          • Re: (Score:1)

            by Tablizer ( 95088 )

            I assumed that "one sided trade makes you weak" means economically weak. You seem to be describing "politically weak", which the models didn't really address.

            • Are you saying Bezos is giving you all his money?

              You, and the majority of the people in this country, are economically weakened by one sided trade with Bezos. Does he buy your cloud services?

              • Re: (Score:1)

                by Tablizer ( 95088 )

                I'm not sure what your point is.

      • We trade them our jobs and they give us cheap, shoddy goods in return. I'm sure they would buy our intellectual property if it was cheaper than stealing it.

        Enjoy your viewpoint, it may not be legal to have it in a couple of years.

      • Re: (Score:1)

        by Anonymous Coward

        How can China buy US exports, when the US bans it? China has been asking for decades for higher value tech from the US, just like it gets from Germany. The US bans it. Then the US expects to make up for the huge trade imbalance by shipping food products and other commodities to China.

      • Re: (Score:2)

        by rtb61 ( 674572 )

        This is the cyber era, they can attack each others tech corporations, hack them and cripple the share price and customer base. Not so much for Chinese tech corporations but very much so for US and this sneaky little background skulkers leading most of the skulduggery the UK government. The USA has most stupidly opened up the ecomic market to attack, governments attacking foriegn corporations to cripple their revenue and in turn cripple the revenue of their government. The USA in yet again the most moronic f

    • This is a misconception. Before WWI Germany was trading a lot with Great Britain and France, and that did not prevent one of the most bloody and most pointless wars in history.

      • Right. Take one example from history that is likely more akin to a black swan event that rarely occurs. Can you name other events where nations were huge trading partners and then war broke out?

        There were many OTHER factors that caused WW1. The first of which is the fact that all the nations 'treatied' up, allowing what would be considered a small news event today in a 'bumfuck' country in E. Europe to cause a break out war all over the world. Today it would be like Rwanda in the 90s causing a world war

        • Can you name other events where nations were huge trading partners and then war broke out?

          Russia and Ukraine?

          • And what were the underlying factors there? NATO encroaching further to the east? Despite a "gentleman's agreement" between Bush and Goberchov that NATO wouldn't move pass E. Germany? US Ambass. Victoria Nuland saying fuck the EU when Germany and other EU states expressed their worries about what the US was trying to do in Ukraine and US attempts to destablize? To Russia Ukraine is a RED line in terms of state security. And yet, total war did not occur in proper Ukraine, and fighting only occurred gene

            • You have asked for any other event, I have provided one.
              I can provide more if you want, like Greece and Turkey a couple of decades ago.

              • I suppose it depends on what our definition of war is. Can we even count what has happened between Russia and Ukraine a war? Crimea was lost without even a bullet shot. What they did do is provide support to insurgency. Russia isn't at war with Ukraine directly. Ukraine has already stated that they would lost an outright war with Russia within days.

                I simply don't know enough about Greece and Turkey past economic relations to know whether there was "interdependence" or not. But I suspect that they didn

                • Well, Ukraine has officially been in the state of war when Russian boats shot at Ukrainian boats, so I guess it was a war after all.
                  Russia was also forced to stop manufacturing the An-148 and will probably retire them all as soon as a heavy check is required, the replacement for the Zenit has been launched exactly two times in the past 6 years and Russia so far has only been able to bring back the manufacturing of just one helicopter engine type and only in small volume.

                  • That is regarded an "incident" at least in the eyes of international law. War is usually defined at a much grander in scale than simply shooting at boats, no one dying, and boats later being returned even if their toilets were supposedly stripped.

                    Obviously there's armed conflict occurring in Ukraine. The question is whether it's an "international" armed conflict between Russia and Ukraine, therefore international law, such as international humanitarian laws e.g. geneva conv. would apply.

                    When the US assist

          • I would also like to add that give the circumstances. What we are seeing is more of a proxy war between Russia and the US in Ukraine's territory, rather than a war between Russia and Ukraine. Furthermore interdependence in this case was extremely one sided. It was not so much "interdependence", but Ukraine's dependence on Russia, where Russia wasn't also depended on Ukraine's trade.

            • Well yes, but actually no.
              A large part of Russian aerospace industry was dependent on Ukrainian manufacturers, be it helicopter engines or missile control systems.

    • Same thing happened leading into WW2 (Smoot-Hawley anybody), yet we cannot seem to learn form out mistakes

      Umm, Smoot-Hawley probably kicked off the Great Depression. It didn't give make WW2 more likely (or less), since the proximate cause of WW2 (other than the lunatic-in-charge of Germany) was the reparations clause(s) of the Treaty of Versailles....

    • By "get back to normal", do you mean trading with a country that has no parity with our labor and pollution laws?

      Let's be real... we never should have been trading with China in the first place. We put them in a position of incredible economic power and it's our own damn fault if we're struggling to compete and now have to backtrack on decades of shortsightedness.

    • Comment removed based on user account deletion

    • I don't know that trade with China can prevent war.

      All it can really do is make China more powerful before the war that is inevitable when their people start starving.

      And that's going to happen sooner or later, because their growth is based on nothing.

    • (Smoot-Hawley anybody), yet we cannot seem to learn form out mistakes

      It's hard to tell if Smoot-Hawley would have the same effect today because back then USA was running a trade surplus, unlike our current trade deficit. It's dumb to start a trade war when you're running surplus trade.

      China does cheat, and letting cheaters keep cheating has got to have side effects eventually. If not economic side-effects, then the effects of fostering their bad habits.

  • No Chinese manufacturer could even make the nib of a ballpoint pen (it requires a special steel alloy) until 2017 (sounds outrageous, but google it -- Reference: https://www.bbc.com/news/busin... [bbc.com] ). I'm not sure they can ramp up the advanced materials knowledge needed to build advanced semiconductor technology.

    • I've heard that line dozens of times, and it never proves to be right. Just because they can't today is a poor reason to commit the sin of extrapolation, particularly when it's been lacking in predictive power so many other times.

    • That is a pretty interesting anecdote. Whether it's indicative of China being unable to develop advanced semiconductors - well there is this little mom & pop upstart called TSMC already.

      • You're saying Taiwan is part of China? Them's fighting words.

        • Even if we stop saying it's "part of" China, would you say there are a lot of barriers to tech transfer between Taiwan and the mainland?
          • There are, with TSMC. They have been running a tight ship.

            However, it feels like Hong Kong is just a dress rehearsal for Taiwan. If thing go that way, then there really won't be any barriers to tech transfer between Taiwan and mainland China.

            • >>There are, with TSMC. They have been running a tight ship.

              That has got to be the funniest thing I have seen all day

      • - well there is this little mom & pop upstart called TSMC already.

        You misspelled SMIC.

        China is investing heavily in semiconductors right now, because of the stupidity of trying to stop ZTE from buying semiconductors from US companies.

        https://www.ft.com/content/a1a... [ft.com]

    • Except the USA also imports high quality steel from Japan and Germany. I wonder why that is.

    • They no longer need to "ramp it up"... See Solarwinds.

      The Russians and Chinese digitally invaded and occupied not just government but industry.

      They have all the data to simply duplicate it now.

      • I remember people speculating what "cyber war" would look like, and we have actually been living in it for about 6 years

  • Nobody panic yet. A Biden admin is about to be installed, and Hunter has plenty of experience dealing in international trade.

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