Trade tensions and the global technology sector
In June 2019, I joined a panel at the World Forum for FDI in Sydney, organised by Conway and moderated by Mike Chinoy, to discuss the challenges and opportunities confronting technology companies in an increasingly contested global economy. I was working at Huawei at the time, and the discussion ranged from investment opportunities in Asia to the US–China trade war, technology governance and the risks of economic decoupling.
The video below brings together excerpts from my interventions. The summary that follows reflects the arguments and expectations I expressed in June 2019.
Key points from my interventions
Growth opportunities depend on the policy environment
India and Indonesia stood out as promising markets for technology investment, particularly in cloud services and consumer electronics. But market size alone was not enough. I argued that industrial policies could create opportunities for companies to support national development goals, while warning that poorly designed local-content requirements could impose costs that discouraged investment.
Skills determine who benefits from technology investment
Governments frequently asked Huawei to locate manufacturing or research and development in their countries. A central constraint was the availability of skilled people: an R&D centre needs a sufficiently deep pool of engineers and computer science graduates. I also distinguished equality of opportunity from equality of outcomes. As automation disrupted existing jobs, governments needed to provide opportunities for retraining, while individuals also had a responsibility to take up those opportunities.
Decoupling creates costs beyond the technology sector
I explained that restrictions on Huawei affected more than sales into the US market. Export controls could also undermine the usefulness of research conducted there, creating pressure to move activities elsewhere. I saw possible openings for other technology centres, including Singapore and Israel, but warned against treating decoupling as an economic opportunity without considering its wider consequences. Drawing on post-war European integration, I argued that deeper economic ties could help restrain conflict, whereas separating the US and Chinese economies moved in the opposite direction.
Restrictions can accelerate the search for alternatives
I argued that the use of government restrictions to determine whom companies could do business with would make firms reconsider where they incorporated, held intellectual property and raised capital. I also anticipated stronger Chinese efforts to develop alternatives to US operating systems and software platforms. These were predictions made during the panel, rather than conclusions drawn with the benefit of hindsight.
Corporate responsibility needs consistent standards
Asked about surveillance technology and the uses of equipment in China, I challenged what I saw as inconsistent scrutiny of Chinese technology firms and Western companies supplying military or security-related products. My argument was that responsibility for the downstream uses of technology required a more nuanced and consistent approach, rather than assuming that a supplier should be liable for every possible use of its products.
Investment follows both opportunity and regulatory certainty
In response to a question about Chinese outward investment, I discussed the tightening of investment screening in destination countries alongside restrictions imposed by China itself. I again highlighted India's market size and technical talent, including its attraction as an R&D location, while arguing that improvements in regulation and the functioning of the courts could make it easier for firms to invest and operate.
Australia has to navigate competing relationships
I argued for a pragmatic Australian relationship with China that recognised differences in values while preserving opportunities for economic, commercial and cultural exchange. Australia faced a particular challenge: its deep strategic relationship with the United States existed alongside a deep economic relationship with China. Escalating tensions between the two therefore placed Australia in a difficult position.
AI requires safeguards rather than blanket fear
My closing intervention treated artificial intelligence as a powerful tool whose consequences depend on how it is used and governed. Like other technologies capable of bringing both benefits and harm, AI calls for competent management and effective safeguards. The task is to manage those risks while retaining the opportunities the technology offers.
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