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Commentary: Develop core technology to break US high-tech monopoly

By Ni Guangnan (People's Daily)    14:51, July 26, 2018

High-tech sectors have been put on a main battlefield of the trade war unilaterally provoked by the US, which has already angered the whole world.

From the fine on Chinese tech firm ZTE, to the high tariffs levied on Chinese high-tech products, the US administration is aiming at nothing but containing the development of China’s high-tech industry.

How can China’s high-tech enterprises, especially those in the internet information sector gain a foothold when facing the overwhelming technological monopoly of the US?

The answer, I believe, is to step up efforts on research and development of the country’s own technologies, and build a safe and controllable system of information technology.

Some believe that Chinese high-tech industry should establish its own advantages, but the fact is that China has always been in a passive and defensive position in this monopolized market. Though the country has made tremendous achievements in internet information technologies, it still sees a large gap between itself and the US. 

China is still dependent on other countries in many core technologies, and many foreign products and services still monopolize its market. A risk control is more important against such background.

It is almost impossible to break monopoly in the information technology industry, which is different with some traditional industries like auto sector.

The automobile market is also dominated by some big names, but the emerging manufacturers still have space to expand ground through differentiation and co-exist with the former comers. The competition is fierce, but the market is far from being monopolized. 

However, that is not the case in the information technology sector. Only a few brands can exist under each sub-sector, and even excellent new technology probably cannot survive the competition. For instance, the Windows operating system of the Microsoft has monopolized users’ desktops, but it still tumbled in the mobile operating system competition. 

The failure of Microsoft in this area is not because of technologies, but the lack of ecology. Similarly, Intel has control over both desktop and server markets with its advanced CPU technologies, but its performance in the mobile sector is far from passable.

Both examples indicate that the existing monopoly in information technology industry may kill new techniques, even the great ones.

In other words, the information technology industry is challenged more by monopoly. As a result, apart from making breakthroughs in research, China also has to find a way to break the monopolies of transnational corporations in order to gain a foothold on the market.

Absolute fairness doesn’t exist in internet information industry, not to mention orders and rationality. We therefore cannot count on reasoning with the US in hope of ending its monopoly.

It’s not easy for new technologies to coexist with monopolists in the internet information industry. In light of such backdrop, China would take considerable time developing its own controllable alternative solutions in the future. The process might have two finishes: failure or success. As long as the alternative solutions work out as planned, they will finally gain a foothold.

In general, whether new technologies can replace old ones depends on both their own competitiveness and ecology, and the latter is sometimes more decisive. It can be well explained by the above two examples of Microsoft and Intel.

As a matter of fact, the number of users and number of technologies are in a proportional relation. Such virtuous circle calls for enough support from the market, otherwise the technology won’t survive a chance. 

Given such background, research and market should be given equal weight when developing internet information technology, as Chinese President Xi Jinping has also stressed the importance of intensified research on core technology under the guidance of market.

Currently, a majority of the internet information markets have been monopolized by foreign enterprises, so the exploitation of government procurement market is of vital importance for China.

China has not yet joined the WTO’s Agreement on Government Procurement (GPA), so its government procurement market remains closed. This sector, as a result, enjoys a great chance in developing China’s own core technologies. 

Though it only accounts for a very small percentage of the country’s general market, it still has a size equivalent to that of a major European country thanks to China’s huge economic aggregate.

China started to develop controllable alternative solutions on electronic official documents in 2014 under the instructions made by Xi in December 20, 2013. The fruits scored in this field have encouraged the development of other sectors.

For instance, the secure intranet project built by China Aerospace Science and Industry Corporation Limited (CASIC) has become the country’s largest controllable production system with the best performance. The system, which now serves 100,000 users, is a result of 4 years’ research and development and an investment of 300 million yuan.

The domestically-developed controllable alternative solutions are expected to be extended in the information technology sector, and the core technology will break the monopoly of foreign brands and gain a foothold in the market. 

It will also ensure the Internet security of government and other important sectors, replenish the short boards of China’s internet information technologies and ultimately help the country get rid of its dependence on others.

(Ni Guangnan is a researcher at Institute of Computing Technology of Chinese Academy of Sciences and an academician at Chinese Academy of Engineering.) 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Hongyu, Bianji)

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