Britain cannot stay with Huawei even if it wants to. US Congress Won’t Authorize Branch of Chinese State – Serving Xi’s Doctrine civil-military merger – acquire global control over a key technological break point.
No ban is required from Downing Street. The French policy of silent deterrence is enough. Any telecommunications group aiming to pursue Huawei’s G5 plans in these circumstances commits financial suicide. Deutsche Telekom internal documents speak of “Armageddon” if the German firm is forced to replace 3 billion euros of Huawei equipment already installed. Armageddon is what they are going to get.
China’s economy seems stronger than it really is because production has been flattered by the intertemporal illusion of a systemic credit bubble. This pushed the public-private debt ratio to 330pc, leading to a forest of bad investment and an ever-decreasing macroeconomic return on loans.
State control over the banking system probably guarantees that it won’t end in a Minsky moment or a classic financial crisis. Rather, it will end in stagnation. According to Capital Economics, the structural economic growth rate has already fallen to 4.5% on the basis of indirect measures and is moving towards 2% to 3% by the beginning of the 2020s.
China is now in trouble. It needs unhindered global access for its companies to reach the critical breakthrough made by Japan and Korea. Instead, he is excluded by country after country in response to provocations. India banned TikTok and 58 other Chinese apps last week, apparently for security reasons. The United States has frozen China Mobile and is blocking Chinese transformers from the power grid. The EU is implementing a regime to filter out Chinese companies suspected of predatory practices.