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R Clark
R Clark
3/30/2017 | 9:01:16 PM
Re: BRILLIANT
Dennis, good question: how does a free market economy cope with a competitor who flouts the rules?  That's one reason why people are talking about applying a reciprocity rule.

The services sector is quite clearcut - China hasn't met its WTO commitments and foreign governments should be seriously thinking about whether they should allow market entry to telecom and cloud companies from China.

The equipment sector is complicated but basically China is using the Snowden revelations as pretext for protectionism.  It definitely requires some sort of nuanced approach -- not much cause for optimisim.
brooks7
brooks7
3/29/2017 | 11:25:19 AM
Re: BRILLIANT
 

Well, given there are only a handful of big ones and only 1 in the US (Cisco) then it is pretty clear.  And by big, I mean $20B+ in revenue.  Cute little firms like Ciena or Juniper are too small.  If the rest of them merged (call it Adtran + Juniper + Calix + Ciena + Infinera + [need some wireless stuff]) maybe you have something.

seven

 
mendyk
mendyk
3/29/2017 | 11:14:33 AM
Re: BRILLIANT
This is where things get a little sticky. Should Western governments intervene to preserve technology suppliers? If so, which ones should they support? How does that kind of intervention fit into an ostensibly free-market economy? There's a lot of nuance here, and right now nuance is in very short supply.
brooks7
brooks7
3/29/2017 | 10:02:22 AM
Re: BRILLIANT
 

Dennis,

 

My point was this has been going on for a couple of decades and getting more and more pervasive.  It is intentional and not going to change.  The entire comm and comm equipment market is being done internally over time to keep Western Companies out.  It is a smart move from a spying and hacking standpoint.  So it is a lot bigger than $194B.  Call it $300B and that is why the Chinese PLA was heavily involved in Huawei.  When they are the only comm equipment vendor left, then China will control all the command and control infrastructure of every country.  No wars, because their will be no way to fight.  It is a great long term strategy.

seven

 
R Clark
R Clark
3/28/2017 | 9:44:43 PM
Re: BRILLIANT
Standards-based protectionism has never really gone away. Now China uses security standards to screen out foreign firms or force them to open up their source code.

Trade issues are complicated, though. Who knew? So far no sign of any new thinking on the part of US administration. Just random complaints.
mendyk
mendyk
3/28/2017 | 5:42:49 PM
Re: BRILLIANT
Right -- and today, Huawei is for the most part barred from the US market. But the focus of the article is on lack of operator competition, which is where most of that $194 billion comes from.
brooks7
brooks7
3/28/2017 | 3:55:21 PM
Re: BRILLIANT
 

It is a bit more than that.  The Chinese have slowly shutting outsiders out of the equipment market as well.  If you go back to my old employer AFC, we were shut out in 1998 for a 1 year period because our equipment required more certifications.  When we got that done, our products had been duplicated to the point where there were mixed systems of our cards with copied cards.  If you want confirmation of this go back to the reason for AFCs stock drop at the time of the Q2 1998 conference call.

The initial point of Huawei was to be able to make equipment and get western vendors out of the network.

seven

 

 
mendyk
mendyk
3/28/2017 | 3:13:12 PM
Re: BRILLIANT
The main issues here center on the willingness to allow foreign investment in telecom providers. So it's a "trade" issue, but not the kind that the current administration is concerned with, which is more about imports/exports than about allowing multinationals to exploit other markets.
rgrutza600
rgrutza600
3/28/2017 | 9:59:36 AM
BRILLIANT
This is exactly the type of issue President Trump is attempting to rectify.  Free trade has been one way, until now.


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