China Prohibits Using US-Owned Technology
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China Prohibits Using US-Owned Technology

Photo by:   Image by Gerd Altmann, Pixabay
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Tomás Lujambio By Tomás Lujambio | Journalist & Industry Analyst - Tue, 09/12/2023 - 17:02

The Chinese government’s decision to ban the use of US-owned technology among government employees, such as iPhones and Tesla cars, further exacerbates an already strained relationship between the two nations. This deterioration is marked by the escalating limitations on their technological partnership through investment and application restrictions. For Apple, the iPhone restriction could result in a potentially significant financial setback of approximately US$200 billion

China justified its decision by citing cybersecurity and privacy concerns following revelations that Tesla surveils its customers through their cars’ cameras, according to Reuters reporting.  Despite Elon Musk's reassurances that Tesla's "camera recordings remain anonymous," reports from multiple employees suggest that the company’s internal computer program could potentially reveal the location of these recordings, raising questions about privacy infringements. A matter that could be read as a violation of Tesla’s own privacy policy, potentially leading to domestic arbitration led by the US Federal Trade Commission. 

This development unfolds against the backdrop of intensifying discussions between the US and China regarding data storage and technological development over the past few months. An ongoing political process that has placed substantial strain on what was once a robust and resilient economic relationship. A noteworthy instance occurred last August, when US President Joe Biden issued an executive order limiting technological investments in Chinese companies. While the US government argues that these measures are essential due to concerns about the potential threat posed by China's technological advancements, the Chinese government perceived them as an attempt to achieve economic decoupling.

The ongoing technological and military competition between the two nations continues to destabilize their relationship. In fact, the Chinese prohibitions on iPhones and Tesla cars compound recent allegations leveled by the US government regarding a suspected state-sponsored cyberattack campaign by the Chinese government. According to Rob Joyce, the Director of Cybersecurity, NSA, "an agent sponsored by China, who resides outside the (US) territory, is using tools embedded in the networks to evade our defenses and leave no trace."

In response, the Chinese government has pursued technological initiatives to reduce the country's dependence on other nations, strengthen domestic technological manufacturing and enhance their national cybersecurity. In response, the US has applied similar restrictions, currently prohibiting the usage of Huawei IoT devices and TikTok within governmental dependencies. 

Meanwhile, in Mexico, souring US-China relations have created significant economic opportunities. The uncertainty surrounding the relationship has enabled Mexico to become the US’ second most important commercial partner, trailing only behind Canada. From January to April, Mexico's cumulative exports to the US market reached $153.5 billion, surpassing both Canada and China, which recorded $138.681 billion and $132.741 billion, respectively. Conversely, Canada became the top destination for American exports, amounting to $29.3 billion, followed closely by Mexico with $24.7 billion.

Furthermore, Mexico's potential as a nearshoring destination is poised to attract increased American investments. Numerous companies are considering establishing operations in Mexico due to its cost-effective and skilled workforce, its proximity to the US and its recent infrastructure developments. This shift in economic dynamics underscores the far-reaching consequences of the escalating tensions between the US and China, presenting Mexico with a strategic opportunity to capitalize on these developments effectively.

Photo by:   Image by Gerd Altmann, Pixabay

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