Biden pushed the “Indo Pacific framework” to contain China. How should China respond?

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Author: brother Mao, this article is reproduced under the authorization of the official account brother Mao’s vision (id:maogeshijue).

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Mountain rain is coming

Recently, the economic situation in the United States is not optimistic. As we have analyzed before, the United States is in the midst of unprecedented inflation, the Federal Reserve has repeatedly raised interest rates violently, and US stocks have repeatedly experienced shocks and plummets. What strategy should the United States use to deal with it?

As we all know, the “manufacturing industry” in the United States has been seriously hollowed out. The United States issues green dollar bills, which can exchange goods all over the world. Therefore, the United States needs a reliable and cheap commodity production base.

Biden’s strategy is actually “Yang Mou”. One is to continue to use China, the traditional “world factory”, and the other is to support “Xinhuan” as a manufacturing base, such as Vietnam and other Southeast Asian countries.

US Treasury Secretary Yellen directly said that the trump administration has “no strategic purpose” for some tariffs on China, and Biden is considering abolishing these tariffs. Biden himself also publicly told reporters that he will soon make a decision on whether to relax tariffs on China.

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(source: World Wide Web)

Relaxing tariffs on China is certainly good for foreign trade manufacturers. However, we should see that the U.S. chose to reduce tariffs at this time mainly for the sake of coping with domestic inflation, which in no way means a fundamental change in its policy towards China. The U.S. strategy to contain and contain China will not change.

Recently, the Biden administration has made frequent moves around China. In the first ten days of May, Biden received the heads of Southeast Asian countries in Washington. Later, Biden visited South Korea and Japan and put forward the “Indian Pacific Economic Framework (IPEF)”.

Biden’s intention is very direct. The first is to strengthen the strategic solicitation to China’s neighboring countries; The second is to support Southeast Asian countries with lower costs than China to seek so-called “industrial chain diversification” or even “industrial chain decoupling”.

For the United States, the use of “made in China” is mainly for short-term considerations, while containment of China’s economy, technology and industrial chain is a long-term intention. It has to be said that the Biden administration has a vicious vision, and we must not take it lightly.

China’s economy has maintained rapid growth for decades. Although the COVID-19 since 2020 will inevitably cause some impact on the economic operation, it is an indisputable fact that the gap between China’s GDP and that of the United States is becoming smaller and smaller.

The global hegemony of the United States is largely based on its own technological advantages. The most emerging and cutting-edge technologies in the world are often monopolized by the United States. Therefore, although the manufacturing industry in the United States has become hollow, it still can often hold others’ throats.

But what makes the United States particularly upset is that China’s development over the years has not only brought about the expansion of its economic size, but also broke the monopoly of the United States in many important and cutting-edge technology fields, ranking among the world’s leading ranks.

Therefore, the United States feels more urgent – if it does not seize the time to contain China, the momentum of China’s rise will be unstoppable.

Launch of Fujian aircraft carrier 003

Just recently, China’s latest aircraft carrier 003 was launched. Militarily, China is a country that does not rely on the breath of the United States and has full strategic autonomy, which is completely different from countries such as Germany and Japan.

At the same time, China’s economic and technological autonomy is also improving, which makes the United States feel like a thorn in the back.

China already has independent high-speed rail technology, and the total mileage of high-speed rail exceeds 70% of the world; Take the lead in applying 5g in the world; The new energy industry is booming, and the PV production capacity and the production and sales of new energy vehicles rank first in the world; It is the only economy outside the United States with a large Internet company ecosystem

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China is competing for the technological commanding heights

The Biden administration has seen China’s strength and threats, but can the US attempt to contain China this time be realized?

impossible.

In fact, even digging Roosevelt out of his grave will not stop China’s rise, let alone Biden, who dozes off from time to time.

The new round of scientific and technological revolution has a profound impact on the global pattern. We might as well take a look at some important industries in this round of scientific and technological revolution.

Communication, information and digital economy are one of the commanding heights of the current world economic competition, and China has become an important challenger to the United States.

Huawei’s 5g achievements in communication standards are well known to all. Recently, I saw another news that Alibaba cloud has released cipu processors with self-developed technical routes. Many people may not have a clear understanding of the value of this news. In short, Alibaba is competing for the right to define the next generation computing hub.

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Computing power means national power. By defining a computing power hub, you can grasp the lifeline of the industry. Upstream and downstream enterprises should design according to the structure of the hub, just like an invisible kite line, leading the development of the whole industry.

The traditional IT era started in the sixties and seventies of the last century. China’s science and technology industry is still underdeveloped, and the whole industry definition stage has been missed. With the transfer of computing power to the cloud, there is an opportunity to break the original structure.

In the cloud era, China has an independently developed operating system, but lacks an independently developed hub processor. We usually understand “lack of core and soul” in the traditional IT era. In the cloud era, the operating system shields the differences of hardware. If there is a core hub system support, even if we can not produce 7 nm or more advanced 5 nm computing chips, we can achieve computing power surpassing.

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What cipu wants to do is this hub system. It has a high starting point, supported by the cloud operating system Feitian developed by China, and realizes lane changing overtaking in a new way.

This breakthrough is no less than the evolution from 2G network to mobile Internet, which is a computing revolution.

American enterprises are also competing. Overseas manufacturers such as Amazon, Intel and NVIDIA have launched nitro, IPU, DPU and other technologies, while Alibaba cloud has launched cipu this time. This means that China has a chance to win in the definition of the next generation computing power hub.

This is quite similar to the fact that Huawei used European and American technologies in the past and formed its own independent technical route in the 5g era. In the key strategic field of cloud computing, Chinese enterprises can not only ensure the world’s leading performance under the existing technology route, but also explore the next generation of cutting-edge technologies.

China has missed the PC era. Up to now, foreign CPUs and operating systems have been used. However, in the cloud era, everyone started the same, and because Chinese enterprises keep a close eye on the world trend, they have never lagged behind.

Now is the window period for redefining the cloud. If we define it well, the power to define and formulate rules for the next generation computing power system may be in our hands, rather than being monopolized by the United States. This will undoubtedly be another milestone in China’s technological autonomy.

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Since the development of computer and Internet technology, computing power has been a new tool for the United States to maintain its global hegemony. In the 21st century, the share of major Western economies in the world is rising only in the United States, and declining in other countries, because the United States controls computing power. The 21st century is an era of computing power, data and network. Whoever does not grasp these technologies will fall behind.

For China, “numeracy” may be more important than other countries. Because China is a super large economy with more than one billion people, the demand for network and computing is naturally larger. If we do not have an independent computing power system, we will pay a huge technical cost every year and generate much higher energy consumption than now.

Alibaba’s initial consideration for cloud computing was very realistic. Due to the increasing order size of Taobao tmall, the cost of using traditional IOE (IBM minicomputer, Oracle database and EMC storage device) systems is becoming higher and higher.

Wang Jian, the founder of Alibaba cloud, once calculated an account for Ma Yun. If Alibaba did not do cloud computing, all the new revenue from Taobao every year would be eaten up by it hardware investment. Moreover, the traditional IT architecture can not support the “double 11” scenario at all.

Therefore, Alibaba has independently developed “cloud computing” on its own.

Many scenes in our lives today are related to “cloud computing”. For example, the most typical example is to buy a train ticket. Every transaction is considered as “processing information and outputting specific results”, which needs “computing power” to support.

In general, hundreds of thousands of people buy tickets every day, but once the Spring Festival comes, hundreds of millions of people suddenly have to log on to the website to buy tickets, which may lead to system paralysis and make everyone unable to buy tickets.

So how should the railway department configure the server resources? If the computing power is allocated at the peak when hundreds of millions of people buy tickets every day, it will inevitably cause huge waste. If it is allocated at the peak when hundreds of thousands of people visit, it will not be enough at the peak.

At this time, the role of “cloud computing” comes into play. There is no need for the railway department to allocate resources. All servers are deployed in the cloud. The amount of “computing power” required is like the water in the faucet, realizing the optimal allocation of “computing power” resources.

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In fact, digital payment, car navigation, takeout orders, weather forecasts, short videos, etc. in our daily life are all supported by computing power, which is the so-called “everything is calculated”.

Just imagine that if China does not have an independent cloud computing service provider like Alibaba cloud, the computing power demand behind it will be monopolized by American enterprises, which is also a potential threat to China’s security.

There is a process for any technology to blossom and bear fruit. Over the past decade, Alibaba cloud computing has achieved a breakthrough from quantitative accumulation to qualitative breakthrough.

According to the latest annual cloud computing report released by Gartner, an international authority, in December 2021, Alibaba cloud’s IAAs infrastructure capability ranked first in the world, and scored the highest scores in the four core evaluations of computing, storage, network and security. This is also the first time that China’s cloud has surpassed Amazon, Microsoft, Google and other international manufacturers. In other words, in this generation of cloud computing technology, Alibaba is already a “learning bully”.

Now with cipu, alibaba will no longer be only the winner of the Olympic Games in the global cloud computing field, but will be promoted to the winner of the Olympic Games, which is undoubtedly a greater breakthrough.

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No one can contain China

Today, no one can contain China.

The Biden administration’s recent means of encircling China could have been successful more than 20 years ago.

In the 1990s, China’s economic system reform was just launched. China’s attraction to foreign investment has not yet reached a climax, and the undertaking of industrial transfer has also remained in low-end industries. Not to mention the core technology, even the ordinary technology of manufacturing industry, China has not made a breakthrough. It is necessary to import dyes at a high price to help foreign factories to work on behalf of the workers.

At that time, to contain China, the United States only needed to exclude China from the global industrial chain.

In 1999, China’s GDP was $1.09 trillion, while that of the United States was $9.63 trillion. China is 11.3% of that of the United States. What a terrible gap.

Not to mention the United States, even Japan is an unattainable goal for China. After all, China’s GDP that year was only 23.9% of Japan’s.

A few years later, in 2005, a netizen with the online name “Xueliang Saber” published a prediction model on a forum, predicting that China’s GDP would surpass Japan by 2030, which triggered a wave of quarrels and ridicules. Many people believed that “China has no chance to surpass Japan”.

In 2013, “Xueliang Saber” died of cancer, but he saw the day when his argument was proved to be correct: in 2012, China’s GDP exceeded that of Japan.

By 2021, China’s GDP has been more than three times that of Japan, and has reached 77.1% of that of the United States.

But now, China’s position in the global industrial chain has long been indispensable, and great changes have taken place in China’s position in the industrial chain. China has made great efforts to climb the “science and technology tree”, has a lot of independent technologies, and has broken the monopoly of the West in many fields.

The huge Chinese market has driven the evolution of many industries from 0 to 1 and from 1 to 10. China’s “infrastructure maniac” has long been popular. This is not only an achievement in the field of transportation, but also drives the development of shield machine and other high-end manufacturing industries.

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There are large mountains and hills in the central and western regions. It is too hard to build Panshan road. We can only build tunnels. However, tunnels need shield machines. China does not have them, and once we had to import them.

A shield machine imported is a sky high price of 350million yuan. If it breaks down, it can only be shut down. Please ask foreign manufacturers to fly over to repair it. The maintenance cost per person per day is as high as 21000 yuan.

However, in the era of large-scale infrastructure construction, China needs too many shield machines. Can’t they all be imported? It was too late. China had to work hard to tackle key problems and finally developed its own shield machine. Although there were many problems at the beginning, the technology was upgraded through iteration after iteration. It took only three years to reach the level of foreign shield machines, and the price was only one eighth of the foreign price.

Heirik of Germany, wilt, rofat of Canada and Robbins of the United States can only cut prices in silence.

Today, China can independently build the 003 aircraft carrier of electromagnetic ejection, which is also behind China’s powerful shipbuilding industry. China’s share of the world shipbuilding industry ranks first. China’s offshore oil drilling platforms and offshore engineering ships also account for 35% of the world’s share. This year, only China and South Korea can build LNG ships that are hot due to the Russian Ukrainian war.

A few decades ago, China had to rely on the power of the whole country to build a 10000 ton ship, but now for China to build a 100000 ton ship is like playing. The reason why China’s shipbuilding industry has made such achievements is largely due to the huge demand of Chinese enterprises for ships.

In the past, the United States pursued a containment strategy against the Soviet Union, fought an economic war with the Soviet Union, and eventually brought down the Soviet Union. There are many reasons for the failure of the Soviet Camp, but one of the direct reasons is the size disadvantage. The population of the Soviet Eastern European camp is much smaller than that of the American Western camp, while the population of China is more than the sum of all developed countries in the world.

There are 1.4 billion people in China. The reform and opening-up policy has released the national economic vitality. The market-oriented reform in 1992 was successful. After joining the WTO in 2001, China’s economy directly began to leap, reaching the second largest volume in the world at one go.

Under such a large scale, it is easy to form a scale advantage no matter what you do, depending on the strong industrial heritage, the whole chain of industrial chains, high-level knowledge groups and national support policies.

Especially in the high-tech field, the population base and economic strength are the two basic factors affecting scientific and technological innovation.

On the one hand, many industries are naturally economies of scale, and cannot develop without a large enough domestic market. For example, the same e-commerce platform can only serve tens of millions of consumers in one country in Europe, where the market, language and law are highly dispersed. In China, it can cover 1.4 billion consumers and businesses. It not only realizes the optimal allocation of resources, but also massive consumer demand, which also drives the development of cloud computing and other industries.

Many countries want to develop cutting-edge technologies, but they do not have a large enough market. But China is different. Once it becomes a domestic substitute, it can be used by the market of more than a billion people. In fact, shield machine, communication, cloud computing, photovoltaic, these industries are the same.

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It is precisely because the Chinese market is large enough that Chinese enterprises now, more than those in many developed countries, dare to invest in R & D, because once they have achieved results, they can have very rich returns and form a positive cycle.

At present, China is not only the only country in the world with all industrial categories and no industrial “hollowing out”, but also constantly achieving breakthroughs in core technologies.

In other words,

Compared with the United States, we have not only a strong manufacturing industry, but also a weak scientific and technological innovation.

Data show that 20 years ago, in 2000, China’s investment in scientific and technological research and development was almost one tenth of that of the United States. In 2010, 12 years ago, China’s R & D investment increased to nearly half of that of the United States. By 2019, it had reached 80% of that of the United States. From 1996 to 2018, the annual average growth rate of basic research funds was 19.6%.

At present, China is not only the only country in the world with all industrial categories, but also one of the most active countries in global scientific and technological innovation. From 2020 to 2022, China’s PCT international patent application ranked first in the world for three consecutive years. In 2019, the national r&d expenditure increased by 10.5% over the previous year, and the ratio to GDP was 2.19%.

According to the latest data, Alibaba has invested more than 120billion yuan in R & D in the past fiscal year, accounting for 14%, and the R & D share has exceeded 12% of Amazon’s. Moreover, Alibaba has also ranked among the top ten global computer network research institutions of AI 2000, an authoritative institution, and has joined MIT, Stanford and other top universities in the forefront of computer theory research.

Enterprises such as Alibaba and Huawei are a direct reflection of the growing scientific research investment of Chinese enterprises and China’s strong technological competitiveness.

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future

In any case, the general trend of the United States to contain China will not change.

However, despite the fierce opponents, we should also have confidence in the country and enterprises, because our economy is large enough, the cornerstone of the manufacturing industry is solid enough, and the technology enterprises not only have strength, but also have a forward-looking outlook for the future.

The United States can neither contain us from the industrial chain nor prevent us from breaking through the American monopoly in high-end and emerging technologies.

The list of technologies that we have made breakthroughs, from high-speed rail, shield machine, 5g, and today’s cloud computing, will be longer and longer.

In the future, more and more industry standards may be formulated by Chinese people, and the trend of more and more industries will be led by Chinese enterprises like cloud computing. Why does Ali’s recent cipu release excite me? Because when more and more Chinese enterprises have such capabilities, it will be more and more difficult for the United States to make technological containment against China.

Looking at the recent inflation situation and stock market performance in the United States, we can see that the fundamentals of the U.S. economy are not good. Although our economy has encountered some difficulties, our manufacturing base is strong enough and our technological progress is faster.

The containment and containment of the United States will certainly bring us more economic challenges. But we must have confidence and determination. In the big chess game of China US competition, time is on our side.

This article is reproduced under the authorization of official account brother Mao’s vision (id:maogeshijue).

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