You are the one with the over confidence that bothers me the most. I look at China and I see many examples of them NOT being vigilant at all. Yes, the leadership is good in many areas, but they have enormous blind spots in certain areas from what I can tell (unless they're playing 4d chess, which I highly doubt). In fact, their exceptional performance in many areas of governance blinds people like you from recognizing their deficiencies.
I agree with this.
People need to remember that there is a reason for why the trend in the semiconductor industry is towards horizontal integration.
The best talents, science, and innovation will never happen entirely in one country. Even the US, it does not have the best capabilities in many areas.
There is no country in the world that is entirely autarkic and self-reliant. Many countries already tried import substitution industrialization and being self sufficient in everything. Not least the Soviet Union for about 40 years.
It does not work. Even if a company is guaranteed a domestic market, all this will do in the long run is remove competitive pressures. The domestic industry will fall further and further behind.
If Huawei is forced to source everything domestically, what happens when a foreign company like ASML has the best product? Its domestic source won't be as good, and its product will suffer, compared to its competitors. Then, Huawei has to focus to make sure all its suppliers are the best in the world, which is unrealistic. This prevents it from focusing on its core competencies, its competitive advantages. This is why the trend for decades has been away from vertical integration. To ask Huawei to go into chip manufacturing or running foundries is backwards when its core competency is 5G. And not only that, but there are hundreds, literally thousands of suppliers that go into IT products, with not only IP but years and decades of know-how. There are breakthroughs being made in basic research in every developed country in the world.
If you are not a part of this collaborative
worldwide ecosystem, you are going to fall behind, period. Yes, China can develop some domestic self-sufficiency up and down the supply chain, but the effort put into replicating others' technologies that already exist will not be spent towards improving China's own competitive advantages and going into new innovation. All you are going to do is end up with a cheap substitute that will probably be marginally inferior.
The global semiconductor industry (and other advanced industries) are global for a reason. Not even the US can do anything.
There is only a single hegemonic system. You are either part of it, or you are not. The problem for China today is that the US is in control of the system because it is more centrally located. China has no choice but to work to improve its relations with the US or it risks being forced into economic isolation and losing the relative gains of the Deng-Jiang-Hu years.
