The Economist on Huawei

19 Aug

People mocking Trump don’t see the system which produced him – Arundhati Roy

Establishment narrative managers know how to manipulate public perception without being obvious, and understand that an incompetent steward of empire can snap people out of their trance. They don’t dislike Trump because he does bad things but because he does bad things in a way that startles people out of their sleep – Caitlin Johnstone

Why does the well read red keep tabs on the Economist? Because every now and again it gives us truths that liberal media – their contributions to narrative management tending more to lies of omission than commission1 – won’t go near. Take my post from May 2018, Let’s talk about the Golan. It cites a 2015 Economist report on US conglomerate Genie Oil, drilling in a territory whose occupation by Israel is unlawful – as is grabbing the resources of occupied lands.

(Genie Oil’s board includes: Dick Cheney, whose ties to Haliburton may strike the uncharitable as a shade conflictual given that behemoth’s role in reconstructing an Iraq laid to waste by the invasion he masterminded; Rupert Murdoch, whose press and TV stations want it known that the West’s hostility to Assad is fuelled by heart-warming concerns for democracy and an end to tyranny; Larry – “shouldn’t the World Bank encourage migration of dirty industries to less developed countries?” – Summers; and the 4th Baron of Tring Park, one Jacob Rothschild.)

Since the Golan drilling began on Obama’s and HRC’s watch, you can see what Caitlin is getting at re Establishment dislike of Trump’s less stealthy approach to imperial larceny. That approach was on full display last October with his “relax-folks-we’ve-bagged-the-oil” reassurances.

But as well as entrusting its readers with truths that fly in the face of the empire apologetics of generalist media, the Economist is often more detailed on internecine spats within what I can’t quite wean myself away from calling a ruling class.

(A ridiculous failing on my part, I’m sure of it.)

One such deep structural contretemps has to do with conflicting US interests over China2

America closes the last loophole in its hounding of Huawei

In a few months the Chinese telecoms giant will run out of chips—and options

HUAWEI’S TELECOMS gear is popular around the world thanks to its high quality and low prices. Not in America, where the Chinese giant is banished over (unproven) fears that it could be used by spies in Beijing to eavesdrop on Americans. But expelling Huawei from the United States—and pressing allies to do the same—was not enough for the Trump administration. It seems to want Huawei dead. Full stop. Last year the Department of Commerce (DoC) barred American firms from selling Huawei chips made in America, which oxygenate swathes of the global semiconductor industry. In May the DoC added a rule banning domestic and foreign firms from using American-built chipmaking equipment to create custom-made processors for Huawei.

On August 17th the DoC tightened the noose once again—this time, many experts think, for good. Its new rule prohibits anyone from selling any chips to Huawei, custom or not, if these were produced with American technology. This covers practically every chipmaker in the world, including those in China, thus closing loopholes that the global chip industry’s high-powered lawyers have found in the earlier edicts. The share price of MediaTek, a Taiwanese company which was hoping to sell Huawei generic components, plunged by 10% on the news …

Full story here …


  1. This is not to say liberal media don’t tell flat out lies of commission. See for instance Luke Harding on Paul Manafort’s alleged meetings with Julian Assange at the Ecuador Embassy. And some might deem the Guardian’s suspension of disbelief, in recycling whatever ‘our’ intelligence agencies want us to think, so egregious an abandonment of duty as to be tantamount to lying. On balance though, ignoring bull elephants that are in the room is a safer tactic – and cannier narrative management – than inserting ones which, in truth, were never there.
  2. See also my post last week, Our beautifully democratic wars.

5 Replies to “The Economist on Huawei

  1. “new rule prohibits anyone from selling any chips to Huawei”

    Good luck to them with that one. The only result, and one which is already happening, is that China will devote a lot of money and effort to producing their own chips. They already are able to equal the US in ‘supercomputers’. Subsequently they will become world leaders in better and cheaper chip production, without ‘US technology’ if need be, thus leaving the Yanks and everyone else trying to keep up. If Taiwan chipmakers are affected by the US ruling this is a great ‘own goal’ for the US, which will help compel the Taiwanese into re-integration with China.

    There seems to be a belief in the US that because the Chinese are not ‘white’ and because 50 years ago they had a third world economy, that the Chinese (and incidentally, everyone else who is not a white Anglo-Saxon), is irretrievably stupid. But the Chinese have an outstanding record from 2000 or more years ago of invention and innovation. They are just as capable of invention as anyone else. I remember in the late 1950’s and early 1960’s hearing that “the Japanese can only copy”. Look how that turned out!

    Meanwhile the US elites are ignoring the lessening toleration of racism, sexism and inequality and the deterioration of US infrastructure, the depletion of arable land, global warming, depletion of water resources, and the almost inevitable future mass movements of populations from south to north, (as also are most European governments [as far as we can tell, anyway]). Marx would probably have a quiet chuckle if he were alive just now – prospects for the end of capitalism have never been greater – but we will have to find some way of coping with its destruction of the ecosphere before we can progress.

    • Good luck to them with that one …

      Indeed. And the eventuality you set out is what’s exercising the Economist.

      … because the Chinese are not ‘white’ …

      Jams it’s my firm belief that racism is heavily tapped by Empire propagandists in respect of China. Russia too, since I extend the term, ‘orientalism’, to Western attitudes to slavic peoples. That’s how tales of evil that make no sense can be sold to folk, intellectuals absolutely included, whose critical faculties are disabled by a largely unconscious belief that it’s pointless trying to figure why Arabs, Slavs and Chinese do cruel things. It’s just what they do!

      Marx would probably have a quiet chuckle if he were alive just now …

      A man as hard working, intelligent and rigorously honest as Marx would doubtless revise, given the terra-screeds of post 1867 data, some of his ontological assumptions. It seems to me that capitalism may well give way to something even worse. Some – including no less a figure than David Harvey – say that’s already happened. I disagree, but quail at the horrors to come. Which of course is no excuse for standing idly by …

      • Well, I disagree that “something even worse” is coming, if you mean by that a state directed situation. The US is falling apart. Bridges, roads etc need billions to bring them up to standard. The US governments national debt is in the multi-trillions. Other countries are steadily de-coupling themselves from the dollar (they invaded Libya to try to stop this, but it goes on even more steadily), so this debt is unsustainable. The US armed forces get more and more funding, while their efficiency goes through the floor. The US taxpayer is gouged to pay for machines like the F-35 which by all accounts is a turkey, needs more down-time investment, but has much less actual flight-time, so will fail in actual combat, but bigger profits for the war economy etc. etc. and so on for the rest of the armed forces. Meanwhile the populace are revolting (some of them literally) and delusion is rife in the ruling circles.

        The same is true in a lesser way in the EU, UK (Johnston and his non-travelling clown circus of incompetent throw-backs) and all the other ‘usual suspects’ Meanwhile Russia and China, while by no means paradises on earth, have at least competent leadership and are progressing technically, overtaking the ‘west’ in many spheres. China looks like emerging as a certainty to take the position of the US, and while there is no such thing as a ‘good hegemon’ they don’t seem to be as arrogant and vicious, and may self-restrain themselves. They have a 3000 year old civilisation which has many really civilised aspects. But then again, so did the Japanese!

        Of course, if global warming etc. and mass population movements take place then it is very possible that your ‘worse situation’ becomes real. But it is also an opportunity to replace the system with a better one. The only problem I can see is that although there are many young people who are environmentally aware, but possibly not so politically aware, they are not organised under any sort of party or any other discipline. I think this is necessary to keep people in a cohesive group. Possibly this will emerge under the stress of events, but meanwhile, blogs such as yours may have an effect in showing the way.

        Ah, who knows really. I don’t expect to be around to see what happens, unless re-incarnation is true. Actually, I think it is, and I’m not looking forward to it. As they say, prophesy is difficult, especially about the future. “Interesting times”

        • Well, I disagree that “something even worse” is coming, if you mean by that a state directed situation.

          I don’t. I mean a descent into chaos. Now globalised relations of capitalist production have seen to it that his vision of a proletariat, possessed of means (its being concentrated in huge mills and factories) and motive (its systemic exploitation to extract surplus value at point of production) to overthrow an obscene world order no longer applies in the West. The ‘something worse’ I have in mind is either the collapse of state authority and rise of lawless thuggery, or the unfurling by a desperate bourgeois order of velvet glove to reveal iron claw.

          (As it has in the past, when its systemic crises have seen it resort to the more expensive, and less business conducive, option of fascism.)

          There are several reasons I no longer buy the vanguard party model. One is my point about the shifting to the global south of industrial production. Another is that advanced capitalism’s monopoly on violence, repression, monitoring and intelligence gathering surpasses anything Marx foresaw, or Lenin confronted. It also surpasses the wildest dreams of the great totalitarianisms of the twentieth century.

          Since I have zero faith, either, in ‘the parliamentary road to socialism’ – despite my knowing that it’s a case of socialism or barbarism – I’m in a bit of a bind. I’m with Shakespeare in Henry IV – “speak the truth and shame the devil”. And with Sartre: “look to the future not with pessimism but with stern optimism”.

    • On Capitalism Mason, in one of his books before fame went to his head, observes the systemic renewal process and the criteria necessary for that process first put forward in modern times by the former Soviet economist Kondratiev (who was rewarded with the gulag and eventual execution for this blasphemy – which just goes to show how political idealogues can’t cope with systems thinking and it’s scientific basis).*

      * And if you think that’s limited to oxygen breathers you might want to check this out:

      Anyway, back to the narrative.

      The analysis being that the renewal process cycle by which former small entrepreneurial enterprises which have grown, matured and profited from what was previous new technology are allowed to go under rather than be classed as too big to fail. This process of ‘creative destruction’ enables the cycle to continue over identifiable time periods.

      There would appear to be a compelling argument, which Mason puts (albeit in a particular wider context), which observes this renewal cycle has stalled as a result of the success of special interest lobby groups capturing State policy to massively subsidise what are now old industries. Imagine, as an example, the British Crown subsidising Stagecoach travel and barge haulage interests to the extent of stifling the (at the time) new rail technology in the way that Carbon, mainly oil based, or nuclear energy is subsidised to the detriment of cleaner energy technologies.

      The too big to fail banks have their counterparts in too big to fail Corporations. Many of them effectively zombie companies who in previous iterations of the Capitalist renewal cycle would have been allowed to go under and fail in order for the process cycle to continue on its merry way.

      Take Apple. It took the best part of thirty years or so for Apple to reach a stock capitalisation of a $1 Trillion. It’s taken only a further two years to double that as it takes advantage of fiat money printing by Central Banks to borrow money at near zero interest rates to buy back its own stock and raise its “value” on the Stock market, along with the multi billion (not million any more) bonuses of its CEO and senior Board members) A market which is going through the roof as I type whilst everything else is economically falling apart.

      It can be no accident that the US now houses ten people whose wealth adds up to a $trillion. All from companies which are being given free hot of the press printed out of thin air money which the next umpteen generations of serfs will have responsibility to pay off.

      Some of these being Silicon Valley Companies whose digital costs are virtually zero and whose current stock market value mirrors that of the dot com bubble of twenty years ago.

      The US, meanwhile, is the most debt ridden entity in history. A debt level which is in effect a dead Sovereign debt default walking as alternative trade, financial and economic arrangements centered on the Eurasian landmass led by China and Russia take shape. Finally ending dollar hegemony as the reserve global currency of trade which is the only thing keeping the bankrupt US economy out of Boot Hill.

      The current attempt to freeze history, and the process which Kondratiev described; in which the State hands over land, resources, money, rent, subsidies, trade and control to a small number of favoured CEOs and their Corporate minions on a monopoly basis is not that dissimilar to the Crown handing out the same ‘favours’ to Lords and Barons in the feudal Middle Ages. Only the labels have changed.

      And in the UK, from that perspective, the infrastructure of that Crown patronage remains largely intact through a ‘realm’ of old hierarchical institutions such as Lord Lieutenants and Deputy Lieutenants in every County and so on.

      What’s probably worse this time around is the rapidly developing automation of productive tasks through AI which is substituting for human Labour at an alarming rate. Undermining the Labour theory of value as more and more workers become surplus to requirements. The low hanging fruit of blue collar unskilled and semi skilled were flushed down that pan several decades ago and the middle class liberals are about to go through the same traumatic process. A process which is drawing in its own previously made active and cheering onlookers:

      An engineered process which seems to be breaking the link between work and access to the resources necessary to survive and thrive for more and more of the populace.

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