US Treasury Secretary Steven Mnuchin led his side in latest round of talks held in Beijing last week to end trade dispute with China. Experts have raised doubts if it will convince Chinese leaders to implement much-needed reforms such as reducing the size of its dominant public companies. In the 1980s, the US was embroiled in a similar trade dispute with one of its closest allies - Japan.
“This phenomenon is leading to what I call hollowing out of American industry. America’s industrial establishment is being reduced to a mere shell, and the same is happening all over Europe,” he wrote in his book Made in Japan. The US and its allies such as Australia and New Zealand fear that the Chinese government could use Huawei equipment for espionage.has been able to provide any evidence of so-called backdoors in the Huawei equipment that can be used to spy on people or institutions. the issue has become politicised since the arrest of Huawei’s Chief Financial Officer Meng Wanzhou, in Canada, on Washington’s extradition request.
China has invested heavily in emerging businesses such as renewable energy by backing its state-run companies. The World Trade Organisation prohibits rules that require forced technology transfers as a trade off for granting access to market. But in the absence of any hard evidence, it’s difficult to penalise Beijing.