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(THEME MUSIC PLAYS)
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KAISER KUO: Is China becoming
the world leader in technology?
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KELLY SIMS GALLAGHER:
The United States and China
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are locked in a big power struggle.
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Innovation creates global power.
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Over the last 40 years
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China has had
an unprecedented economic boom.
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SILVIA LINDTNER:
To understand how China innovates
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is to rethink what innovation means
in the first place.
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TRANSLATION: To the front!
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They became the manufacturer
of the world,
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tinkering, innovating and
even stealing the lead in some areas.
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PAUL SCANLAN:
Why was China successful with 5G?
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It got the message
of what could 5G do
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from health care, education,
manufacturing.
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With support from the Chinese state,
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huge corporations like Huawei
have spread their wings.
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JAMES MULVENON:
It was their successes,
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particularly in 5G technology,
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that are really leading the way
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and are causing us
to have to play catch-up to them.
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Today, a tech war between China
and the West is starting to heat up.
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What does it mean
for China and the rest of the world?
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This is the big annual meeting for
the builders of the global internet.
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Tech companies
from all over the world
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have come here to Barcelona, Spain,
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and the biggest delegation is
from the Chinese tech company Huawei.
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Everybody in the world
is talking about 5G.
and the biggest delegation is
from the Chinese tech company Huawei.
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Everybody in the world
is talking about 5G.
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Everybody in the world
is talking about 5G.
In this room
it feels like Huawei is top dog.
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In this room
it feels like Huawei is top dog.
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In this room
They have the biggest pavilion
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They have the biggest pavilion
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and the most sales and patents
They have the biggest pavilion
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and the most sales and patents
in the next-generation internet tech
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called '5G'.
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They are also
just one of many Chinese tech giants
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They are also
taking over global industries -
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taking over global industries -
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solar power,
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wind power,
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drones,
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batteries -
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all fields where Chinese companies
have taken the lead in innovation.
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all fields where Chinese companies
How is China doing it?
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How is China doing it?
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By copying others?
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Or are they finding
By copying others?
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Or are they finding
their own innovation secret sauce?
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Could they even surpass the US
as the world's leading innovator?
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These are questions that
I have discussed time and time again.
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Welcome to the Cynical podcast,
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a weekly discussion
of current affairs in China.
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I'm Kaiser Kuo,
a journalist and podcaster.
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I live in the States,
but for 20 years I lived in China.
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I was comms director
at one of their biggest tech firms
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and guitarist in China's first
heavy metal band, Tang Dynasty.
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and guitarist in China's first
(HEAVY METAL MUSIC PLAYS)
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(HEAVY METAL MUSIC PLAYS)
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Oh.
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Hi!
Hey!
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How are you? Good to see you.
Yeah!
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It's been a while.
Good to see you.
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Yeah, looking forward to this.
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When I interview people
for my podcast,
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I find no shortage of different takes
on the rise of Chinese tech.
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The entire Chinese tech landscape
and business landscape,
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I think that's actually
getting stronger year on year.
The entire Chinese tech landscape
and business landscape,
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I think that's actually
getting stronger year on year.
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I think that's actually
A major misunderstanding
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A major misunderstanding
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that Americans
might have about China
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is that it is mostly focused
on lower-value work
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is that it is mostly focused
on lower-value work
as well as copying,
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as well as copying,
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but China
has mostly transcended that.
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PAUL TRIOLO: China is really
the only peer competitor of the US
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that has companies competing
across the technology sector.
PAUL TRIOLO: China is really
the only peer competitor of the US
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that has companies competing
across the technology sector.
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China is beating the United States
in tech-heavy industries.
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It accounts for a third
of global output
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in knowledge-intensive industries
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in knowledge-intensive industries
compared with the United States,
which accounts for 20%.
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compared with the United States,
which accounts for 20%.
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Today, it might be surprising
to think of China
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Today, it might be surprising
as a technology leader...
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as a technology leader...
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..but for much of history
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China WAS the world leader
..but for much of history
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China WAS the world leader
in science and innovation.
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In fact,
the shame of losing this position
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and the dream of regaining it
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were major motivations
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for the founders
of the Chinese Communist Party.
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It all started
with a widespread national awakening.
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ARCHIVE REPORTER: 3,000 students
gather in front of Tiananmen
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ARCHIVE REPORTER: 3,000 students
on 4 May
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on 4 May
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shouting,
on 4 May
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shouting,
"China is for the Chinese people."
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So, to many Chinese,
shouting,
"China is for the Chinese people."
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So, to many Chinese,
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they saw science and technology
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as a way of national rejuvenation
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as a way of national rejuvenation
and national salvation,
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and national salvation,
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and it became
a foundational principle
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and it became
of the modern Chinese state.
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of the modern Chinese state.
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Advancing science and technology
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truly became a national obsession
in 1978
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with the rise of the then
Chinese leader, Deng Xiaoping.
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ARCHIVE REPORTER: A new beginning
in US-China relations.
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Deng opened China to the world
so it could learn foreign technology.
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His market reforms helped lift over
700 million people out of poverty.
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That's more than twice
the population of the US.
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But this was only part
of Deng's plan.
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Another goal was to reclaim
China's historical place
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as world leader
in science and technology
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within a generation.
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So, more than four decades later,
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how is Deng's plan going?
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To many Chinese,
how is Deng's plan going?
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To many Chinese,
there is no better example of success
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To many Chinese,
than the tech giant Huawei,
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than the tech giant Huawei,
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but it's also at the centre
of a storm of accusations
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of intellectual property theft
and ties with the Chinese government.
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With all the controversy, it's really
easy to overlook something -
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With all the controversy, it's really
this company DOES innovate
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this company DOES innovate
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and it does it in a very
different way than we do in the West.
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The first thing you notice
when stepping onto a Huawei campus
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The first thing you notice
is its style -
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is its style -
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Renaissance architecture,
marble statues, European luxury.
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It's all unmistakably Huawei.
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But, despite the Disney vibes,
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it's the perfect place
to start exploring
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how Chinese tech companies innovate.
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So, this is our library.
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Paul Scanlan
is Huawei's chief technology officer.
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He was drawn to China from abroad
to work in tech
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in part because he was impressed
by Huawei's massive investment
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in part because he was impressed
in research and development.
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in research and development.
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PAUL SCANLAN: Why I love
the company, it's very simple -
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PAUL SCANLAN: Why I love
it's a platform that allows me
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it's a platform that allows me
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to take a lot of the ideas I have
to the world.
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to take a lot of the ideas I have
The platform is an R and D platform.
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The platform is an R and D platform.
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We spend more than 22%
The platform is an R and D platform.
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We spend more than 22%
of our gross revenue on R and D.
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We spend more than 22%
That makes Huawei
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That makes Huawei
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one of the world's largest corporate
spenders on research and development.
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They've set more technical standards
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than any other organisation
in the world for 5G.
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5G is an advanced
wireless communication technology.
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Because it operates
at higher frequencies than 4G
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it can be up to 100 times faster
and also more reliable.
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It also hasn't really
been fully deployed yet,
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but in the small town of Zhenyuan
we can start to see what it can do.
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With 4G, our cell phone towers
connect mainly to our phones,
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and there's a limit
to how many devices
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and there's a limit
any one tower can handle at a time.
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any one tower can handle at a time.
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5G is a dramatic improvement
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that promises to connect all sorts
of devices wirelessly to the internet
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and in much greater numbers.
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In wireless communications
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data is transmitted by radio waves.
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As you progress from 3G to 4G to 5G,
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the frequency of the radio waves
becomes higher and higher.
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the frequency of the radio waves
This allows more data to be carried,
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This allows more data to be carried,
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enabling faster
download and upload speeds.
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This is a big deal
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because so much of tech
depends on internet infrastructure.
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because so much of tech
As 3G progressed to 4G,
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As 3G progressed to 4G,
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increased data loads enabled
simple phone calls to progress
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to ride-hailing apps, food-delivery
apps, video conferences.
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The list is endless.
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Increased data loads helped build
the so-called 'Internet of Things',
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allowing devices to talk to devices,
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like cars talking to cars
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or machines in a factory coordinating
to become fully automated.
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PAUL SCANLAN:
Why was China successful with 5G?
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It got the message
of what could 5G do.
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It got the message
that, if I can provide connectivity,
It got the message
of what could 5G do.
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It got the message
that, if I can provide connectivity,
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I can collect data information.
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Based on information,
AI algorithms can do things
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from health care, education,
manufacturing, OK,
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from health care, education,
across all of the sectors.
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across all of the sectors.
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It understood that urgently.
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Huawei is a genuinely impressive,
state-of-the-art, world-class
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telecoms-equipment
manufacturing company.
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And it was their successes,
particularly in 5G technology,
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And it was their successes,
that are really leading the way
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that are really leading the way
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and are causing us
to have to play catch-up to them.
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TRANSLATION: What's being installed
right now is a new 5G antenna.
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It supports
a very wide range of frequencies,
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including
our 700 megahertz frequency.
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China is deploying 5G
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at a scale greater
than any other place in the world.
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China is exceptionally good
at developing infrastructure,
at a scale greater
than any other place in the world.
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China is exceptionally good
at developing infrastructure,
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whether it's, you know,
5G infrastructure
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whether it's, you know,
5G infrastructure
or electric-grid infrastructure
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or electric-grid infrastructure
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or electric-vehicle
charging infrastructure.
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It has this ability to do good
planning and then also to execute.
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Authorities in China
are pushing 5G hard,
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Authorities in China
turning difficult-to-connect places
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turning difficult-to-connect places
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like China's mountainous
Guizhou province
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into laboratories
for Huawei's 5G applications.
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(INDISTINCT CHATTER)
into laboratories
for Huawei's 5G applications.
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(INDISTINCT CHATTER)
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YANG CHANGYU: (TRANSLATION)
Out here in the mountains,
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the internet has always been poor.
Out here in the mountains,
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the internet has always been poor.
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the internet has always been poor.
A little bit of bad weather,
a little bit of wind - no internet.
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A little bit of bad weather,
a little bit of wind - no internet.
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A little bit of bad weather,
It was really hard to get a signal.
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It was really hard to get a signal.
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It was really hard to get a signal.
(SPEAKS IN OWN LANGUAGE)
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(SPEAKS IN OWN LANGUAGE)
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In remote places forget about it.
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But it has changed recently.
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Now with 5G
we've started doing smart farming.
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(SPEAKS IN OWN LANGUAGE)
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5G technology
is able to make stronger connections
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and transfer more data
to more points.
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This enables places
like this tea farm
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to deploy wireless sensors
in hard-to-reach places.
242
00:11:11,940 --> 00:11:17,260
TRANSLATION: This tea plantation
has really embraced 'smart' farming.
243
00:11:17,260 --> 00:11:18,740
(SPEAKS IN OWN LANGUAGE)
244
00:11:18,740 --> 00:11:21,940
It's been quite useful
for our agricultural management.
245
00:11:23,620 --> 00:11:25,420
These sensors all help us predict
246
00:11:25,420 --> 00:11:25,660
the humidity, wind conditions
These sensors all help us predict
247
00:11:25,660 --> 00:11:28,300
the humidity, wind conditions
and temperature.
248
00:11:28,300 --> 00:11:28,540
the humidity, wind conditions
(SPEAKS IN OWN LANGUAGE)
249
00:11:28,540 --> 00:11:30,100
(SPEAKS IN OWN LANGUAGE)
250
00:11:30,100 --> 00:11:34,620
More data leads to better modelling
and better crop yields.
251
00:11:34,620 --> 00:11:37,460
Processing the information
fed to it through 5G,
252
00:11:37,460 --> 00:11:39,980
a smart farming system
can alert farmers
253
00:11:39,980 --> 00:11:45,300
to the optimal times to remove weeds,
plant seeds and harvest crops.
254
00:11:45,300 --> 00:11:49,780
But this is just the beginning
of what 5G can do.
255
00:11:49,780 --> 00:11:51,620
China says its goal
256
00:11:51,620 --> 00:11:54,020
is to ultimately move away from coal
257
00:11:54,020 --> 00:11:56,220
and into cleaner forms of energy.
258
00:11:57,180 --> 00:12:00,860
5G is a critical part of this plan
as well.
259
00:12:01,820 --> 00:12:05,620
This is the Dingzhuang
floating solar farm.
260
00:12:05,620 --> 00:12:08,980
Across a large swath of sea
are endless solar panels,
261
00:12:08,980 --> 00:12:09,220
Across a large swath of sea
each requiring monitoring.
262
00:12:09,220 --> 00:12:11,460
each requiring monitoring.
263
00:12:11,460 --> 00:12:17,620
The plant's expected total output is
550-million kilowatt hours per year.
264
00:12:17,620 --> 00:12:22,220
That's enough to power
52,000 typical American homes.
265
00:12:22,220 --> 00:12:26,540
PAUL SCANLAN: You have tens
of thousands of photovoltaic cells,
266
00:12:26,540 --> 00:12:26,820
and 5G can monitor information
from them
PAUL SCANLAN: You have tens
of thousands of photovoltaic cells,
267
00:12:26,820 --> 00:12:29,140
and 5G can monitor information
from them
268
00:12:29,140 --> 00:12:31,660
more efficiently
than anything else can.
269
00:12:32,940 --> 00:12:35,580
China's national 5G infrastructure
270
00:12:35,580 --> 00:12:40,500
gives a built-in advantage
to this large-scale solar farm.
271
00:12:40,500 --> 00:12:43,540
Solar-panel technology
is prone to malfunctions
272
00:12:43,540 --> 00:12:49,300
and one problematic panel
can shut down an entire grid.
273
00:12:49,300 --> 00:12:52,140
5G enables each panel
to constantly send data
274
00:12:52,140 --> 00:12:52,380
5G enables each panel
to a central command station,
275
00:12:52,380 --> 00:12:54,020
to a central command station,
276
00:12:54,020 --> 00:12:54,260
making inspections more efficient
to a central command station,
277
00:12:54,260 --> 00:12:58,540
making inspections more efficient
and saving labour costs.
278
00:13:01,420 --> 00:13:07,340
And a solar farm can scale to a size
that wouldn't be possible otherwise.
279
00:13:07,340 --> 00:13:09,140
I can now monitor them
280
00:13:09,140 --> 00:13:12,420
to see whether they're failing
or when they're going to fail
281
00:13:12,420 --> 00:13:17,380
so I can optimise that prediction
of maintenance for these farms.
282
00:13:17,380 --> 00:13:20,340
And there's another
unexpected benefit here.
283
00:13:20,340 --> 00:13:24,300
The shade from the solar farm
actually cools the surrounding water,
284
00:13:24,300 --> 00:13:28,660
helping create an ideal environment
for farming shrimp and other seafood.
285
00:13:28,660 --> 00:13:28,900
helping create an ideal environment
But all of this is possible
286
00:13:28,900 --> 00:13:30,140
But all of this is possible
287
00:13:30,140 --> 00:13:30,380
because the Chinese government
But all of this is possible
288
00:13:30,380 --> 00:13:32,620
because the Chinese government
sees the advantage
289
00:13:32,620 --> 00:13:37,220
of creating a web of connectivity
across the entire country
290
00:13:37,220 --> 00:13:41,820
and is willing to use its central
authority to make it a reality.
291
00:13:41,820 --> 00:13:42,060
5G cellular technology
and is willing to use its central
authority to make it a reality.
292
00:13:42,060 --> 00:13:44,300
5G cellular technology
293
00:13:44,300 --> 00:13:46,580
is really sort of a major leap.
294
00:13:46,580 --> 00:13:46,820
is really sort of a major leap.
And it really
is more of the high-tech future
295
00:13:46,820 --> 00:13:49,100
And it really
is more of the high-tech future
296
00:13:49,100 --> 00:13:52,060
that we've seen in the movies
and in sci-fi
297
00:13:52,060 --> 00:13:55,420
in which we're surrounded
all the time by, you know,
298
00:13:55,420 --> 00:13:59,300
really high-speed data and
the ability to exploit all of that.
299
00:13:59,300 --> 00:13:59,540
And that just basically means
really high-speed data and
the ability to exploit all of that.
300
00:13:59,540 --> 00:14:01,140
And that just basically means
301
00:14:01,140 --> 00:14:06,540
5G will enable much more
precision-based applications.
302
00:14:07,500 --> 00:14:09,100
Driverless cars.
303
00:14:09,100 --> 00:14:11,500
Automated ports and factories.
304
00:14:11,500 --> 00:14:13,740
Next-generation AI.
305
00:14:13,740 --> 00:14:13,980
What all of these things
Next-generation AI.
306
00:14:13,980 --> 00:14:15,500
What all of these things
have in common
307
00:14:15,500 --> 00:14:20,620
is that they can't fully develop
until 5G infrastructure is built.
308
00:14:20,620 --> 00:14:20,860
is that they can't fully develop
And, as with most new infrastructure,
309
00:14:20,860 --> 00:14:23,100
And, as with most new infrastructure,
310
00:14:23,100 --> 00:14:29,100
we don't yet know how it will
change society for better or worse.
311
00:14:29,100 --> 00:14:33,500
(ANDROID CHATTERS)
312
00:14:34,460 --> 00:14:37,500
Why is it that a Chinese company
is leading the way
313
00:14:37,500 --> 00:14:39,740
in building the next generation
of the internet?
314
00:14:41,460 --> 00:14:43,940
There's no doubt
that the Chinese Communist Party
315
00:14:43,940 --> 00:14:47,180
uses its central authority
to force change
316
00:14:47,180 --> 00:14:50,780
in ways that aren't possible
in Western democracies.
317
00:14:50,780 --> 00:14:55,340
But another key reason
is the intense work culture.
318
00:14:55,340 --> 00:15:00,020
It can be brutal, with six-day weeks
and 12-hour days being the norm.
319
00:15:06,380 --> 00:15:11,460
Western observers often call the
Huawei company culture militaristic.
320
00:15:11,460 --> 00:15:11,700
Western observers often call the
That's probably part of the story.
321
00:15:11,700 --> 00:15:14,940
That's probably part of the story.
322
00:15:14,940 --> 00:15:16,580
But there's also something else.
323
00:15:16,580 --> 00:15:16,820
Huawei tries to motivate
But there's also something else.
324
00:15:16,820 --> 00:15:19,060
Huawei tries to motivate
its employees
325
00:15:19,060 --> 00:15:23,420
in ways that probably
would not fly in Western industry.
326
00:15:23,420 --> 00:15:27,980
Wang Wenjun leads the training
for new recruits.
327
00:15:30,860 --> 00:15:34,020
TRANSLATION:
This is our training area.
328
00:15:34,020 --> 00:15:36,540
I think it's different
than the training facilities
329
00:15:36,540 --> 00:15:38,780
in most other companies.
330
00:15:38,780 --> 00:15:40,980
(SPEAKS IN OWN LANGUAGE)
331
00:15:40,980 --> 00:15:44,300
Our facilities are outdoors,
on top of a mountain.
332
00:15:48,780 --> 00:15:54,100
This slogan... How would
I translate it for foreigners?
333
00:15:54,100 --> 00:15:56,820
"If you want to take
more responsibilities,
334
00:15:56,820 --> 00:15:57,100
"If you want to take
more responsibilities,
"you must work harder
in the training."
335
00:15:57,100 --> 00:16:00,180
"you must work harder
in the training."
336
00:16:02,140 --> 00:16:03,860
I look at these slogans
337
00:16:03,860 --> 00:16:07,820
and think about how out of place
they would seem at a Western company.
338
00:16:08,780 --> 00:16:13,860
The messages are about enduring
hardships and winning battles.
339
00:16:15,180 --> 00:16:17,660
Huawei was founded by Ren Zhengfei,
340
00:16:17,660 --> 00:16:21,260
who started his career
in the Chinese army.
341
00:16:21,260 --> 00:16:22,900
He then went on to found Huawei,
342
00:16:22,900 --> 00:16:27,500
whose name literally means
'Chinese achievement'.
343
00:16:30,180 --> 00:16:33,420
What I find interesting
is how the posters around campus
344
00:16:33,420 --> 00:16:37,380
echo the propaganda style
of the Chinese government.
345
00:16:37,380 --> 00:16:37,660
They talk about the importance
of sacrifice and hard work
echo the propaganda style
of the Chinese government.
346
00:16:37,660 --> 00:16:40,540
They talk about the importance
of sacrifice and hard work
347
00:16:40,540 --> 00:16:44,340
in aiding
China's technological development.
348
00:16:45,300 --> 00:16:49,820
A lot of what Beijing tries to do
is it is trying to use ideology
349
00:16:49,820 --> 00:16:50,100
A lot of what Beijing tries to do
is it is trying to use ideology
to corral a lot of the dynamic firms
and people in China
350
00:16:50,100 --> 00:16:54,860
to corral a lot of the dynamic firms
and people in China
351
00:16:54,860 --> 00:16:58,100
to pursue the goals
that it really wants to have.
352
00:16:59,420 --> 00:17:03,260
WANG WENJUN: (TRANSLATION)
My job is to train the young people
353
00:17:03,260 --> 00:17:06,580
to develop the spirit
of bitter struggle,
354
00:17:06,580 --> 00:17:09,660
to train everyone
to become full with vigour.
355
00:17:09,660 --> 00:17:14,580
Only when you have suffered can you
understand the sweet things in life.
356
00:17:14,580 --> 00:17:19,140
People live good lives now, they
never have experienced the struggle.
357
00:17:19,140 --> 00:17:24,020
The point of this place
is to give them a taste of that.
358
00:17:24,020 --> 00:17:25,540
The people here
359
00:17:25,540 --> 00:17:31,020
train to connect not just China
but every corner of the world.
360
00:17:31,020 --> 00:17:32,820
This is in line
with Chinese state goals,
361
00:17:32,820 --> 00:17:36,620
which seek to export
Chinese technology globally.
362
00:17:37,580 --> 00:17:39,460
KELLY SIMS GALLAGHER:
In countries in Africa
363
00:17:39,460 --> 00:17:39,700
KELLY SIMS GALLAGHER:
you will mostly see
364
00:17:39,700 --> 00:17:40,940
you will mostly see
365
00:17:40,940 --> 00:17:41,140
Chinese equipment everywhere.
you will mostly see
366
00:17:41,140 --> 00:17:43,420
Chinese equipment everywhere.
367
00:17:43,420 --> 00:17:45,820
I was recently in Ethiopia
368
00:17:45,820 --> 00:17:47,540
and I was struck
369
00:17:47,540 --> 00:17:50,020
because I kept having
this out-of-body experience.
370
00:17:50,020 --> 00:17:52,300
I felt like I was in China.
371
00:17:52,300 --> 00:17:54,500
The subway was constructed by China.
372
00:17:54,500 --> 00:17:58,460
The subway cars
have Chinese words in them.
373
00:17:58,460 --> 00:18:01,780
The United States
is not visibly present
374
00:18:01,780 --> 00:18:04,860
in a lot of developing countries
around the world.
375
00:18:04,860 --> 00:18:09,780
Huawei was bringing 5G and
its applications to the entire world,
376
00:18:09,780 --> 00:18:13,740
and then the US government
started to take notice.
377
00:18:15,060 --> 00:18:18,820
CHUCK SCHUMER: Huawei and ZTE
are both state-backed companies.
378
00:18:18,820 --> 00:18:21,140
Their efforts
to enter the American market
379
00:18:21,140 --> 00:18:22,460
is a great example
380
00:18:22,460 --> 00:18:25,820
of how China
attempts to steal our private data
381
00:18:25,820 --> 00:18:26,060
of how China
and intellectual property.
382
00:18:26,060 --> 00:18:27,980
and intellectual property.
383
00:18:27,980 --> 00:18:29,380
In 2018
384
00:18:29,380 --> 00:18:31,100
Huawei CFO, Meng Wanzhou,
385
00:18:31,100 --> 00:18:32,980
the daughter of Huawei founder,
Ren Zhengfei,
386
00:18:32,980 --> 00:18:38,580
was apprehended in Canada under
suspicion of violating US sanctions.
387
00:18:41,100 --> 00:18:44,260
TRANSLATION: The whole world
sees this for what it is.
388
00:18:44,260 --> 00:18:48,860
America is trying to strangle
China's high-tech companies.
389
00:18:48,860 --> 00:18:49,100
America is trying to strangle
In May 2019
390
00:18:49,100 --> 00:18:50,900
In May 2019
391
00:18:50,900 --> 00:18:51,140
the US government placed Huawei
In May 2019
392
00:18:51,140 --> 00:18:54,700
the US government placed Huawei
on the so-called 'Entity List',
393
00:18:54,700 --> 00:18:54,940
the US government placed Huawei
a registry of companies
394
00:18:54,940 --> 00:18:56,180
a registry of companies
395
00:18:56,180 --> 00:19:00,700
that are effectively banned
from doing business in the US.
396
00:19:00,700 --> 00:19:04,780
James Mulvenon is one of the
architects of this policy change.
397
00:19:04,780 --> 00:19:06,820
JAMES MULVENON: The day
that Huawei and its subsidiaries
398
00:19:06,820 --> 00:19:07,060
JAMES MULVENON: The day
were placed on the Entity List
399
00:19:07,060 --> 00:19:08,460
were placed on the Entity List
400
00:19:08,460 --> 00:19:12,620
was, frankly, a day of real sense
of personal accomplishment for me.
401
00:19:12,620 --> 00:19:15,180
I had been writing about Huawei
for 25 years
402
00:19:15,180 --> 00:19:15,420
I had been writing about Huawei
and informing the US government
403
00:19:15,420 --> 00:19:17,060
and informing the US government
404
00:19:17,060 --> 00:19:20,260
about many different features
of Huawei's relationship
405
00:19:20,260 --> 00:19:22,660
with the Chinese military,
with the Chinese government,
406
00:19:22,660 --> 00:19:26,220
its activities abroad that I thought
were suspicious and questionable.
407
00:19:26,220 --> 00:19:28,740
A country is always
going to be extremely protective
408
00:19:28,740 --> 00:19:30,780
of its telecommunications
infrastructure.
409
00:19:30,780 --> 00:19:34,100
It is the way it maintains control
over its territory
410
00:19:34,100 --> 00:19:38,900
and connects its leaders,
its police forces, its military,
411
00:19:38,900 --> 00:19:39,140
and during the Cold War
and connects its leaders,
its police forces, its military,
412
00:19:39,140 --> 00:19:40,420
and during the Cold War
413
00:19:40,420 --> 00:19:40,660
and during the Cold War
the United States government
414
00:19:40,660 --> 00:19:42,940
was the way in which
the United States government
415
00:19:42,940 --> 00:19:45,460
maintained command and control
over weapons
416
00:19:45,460 --> 00:19:47,940
that could have destroyed the world
hundreds of times over.
417
00:19:48,900 --> 00:19:50,380
Mulvenon contends that,
418
00:19:50,380 --> 00:19:53,100
while there hasn't been any proof -
nothing in public at least -
419
00:19:53,100 --> 00:19:53,340
while there hasn't been any proof -
of Huawei's spying in the US,
420
00:19:53,340 --> 00:19:55,580
of Huawei's spying in the US,
421
00:19:55,580 --> 00:20:00,340
there is no way of ensuring a Chinese
company's independence from Beijing.
422
00:20:00,340 --> 00:20:01,980
To protect against this threat,
423
00:20:01,980 --> 00:20:06,500
the US government has mandated
Huawei equipment across the country
424
00:20:06,500 --> 00:20:06,740
the US government has mandated
be ripped out and replaced.
425
00:20:06,740 --> 00:20:09,220
be ripped out and replaced.
426
00:20:11,460 --> 00:20:13,700
In the town of South Canaan,
Pennsylvania,
427
00:20:13,700 --> 00:20:16,500
local telecom company CEO, Jim Kail,
428
00:20:16,500 --> 00:20:19,820
is overseeing
the removal of Huawei equipment
429
00:20:19,820 --> 00:20:22,060
from the internet infrastructure.
430
00:20:22,060 --> 00:20:24,660
But now he faces a new problem -
431
00:20:24,660 --> 00:20:29,340
alternate equipment is three times
more expensive than Huawei's.
432
00:20:29,340 --> 00:20:29,580
alternate equipment is three times
Without Huawei
433
00:20:29,580 --> 00:20:30,820
Without Huawei
434
00:20:30,820 --> 00:20:31,060
there is no cost-effective way to
Without Huawei
435
00:20:31,060 --> 00:20:35,980
there is no cost-effective way to
connect this region to the internet.
436
00:20:35,980 --> 00:20:38,100
JIM KAIL: Our allegiance
is to our own country here,
437
00:20:38,100 --> 00:20:41,060
and that's very important,
I take that very seriously,
438
00:20:41,060 --> 00:20:42,900
and the rest of us,
as rural Americans,
439
00:20:42,900 --> 00:20:43,140
we're patriotic,
and the rest of us,
as rural Americans,
440
00:20:43,140 --> 00:20:44,700
we're patriotic,
441
00:20:44,700 --> 00:20:48,180
and yeah, so, we...we did think
long and hard about that
442
00:20:48,180 --> 00:20:48,420
and yeah, so, we...we did think
before we made that decision.
443
00:20:48,420 --> 00:20:49,660
before we made that decision.
444
00:20:49,660 --> 00:20:49,900
before we made that decision.
Had about 1,300 of these units
deployed in customers' homes.
445
00:20:49,900 --> 00:20:53,500
Had about 1,300 of these units
deployed in customers' homes.
446
00:20:53,500 --> 00:20:56,740
Over the course of the last couple
of years in particular
447
00:20:56,740 --> 00:21:00,660
there was the push
to ban the product and...
448
00:21:00,660 --> 00:21:04,100
Which eventually led to the mandate
where we had to rip and replace.
449
00:21:04,100 --> 00:21:05,940
And we're now in the process
of doing that.
450
00:21:05,940 --> 00:21:08,500
We're taking...swapping out
the Huawei solution
451
00:21:08,500 --> 00:21:08,740
We're taking...swapping out
with a different solution.
452
00:21:08,740 --> 00:21:10,420
with a different solution.
453
00:21:10,420 --> 00:21:10,660
And, actually, that,
with a different solution.
454
00:21:10,660 --> 00:21:12,260
And, actually, that,
when you think about it,
455
00:21:12,260 --> 00:21:14,780
it's actually a windfall for China,
right?
456
00:21:14,780 --> 00:21:17,020
So, you're actually taking equipment
out there, you're ripping it out
457
00:21:17,020 --> 00:21:20,660
and you're going out
and buying new equipment, right?
458
00:21:20,660 --> 00:21:22,260
Buying it from China, right?
459
00:21:22,260 --> 00:21:24,740
I mean, it's the vendors,
the vendors we do business with,
460
00:21:24,740 --> 00:21:26,060
they're getting their parts
from China.
461
00:21:26,060 --> 00:21:29,380
And, so, China is getting a windfall
out of this.
462
00:21:29,380 --> 00:21:31,180
For many observers in America,
463
00:21:31,180 --> 00:21:32,940
the most challenging thing
about Huawei
464
00:21:32,940 --> 00:21:33,180
the most challenging thing
is that they can make products
465
00:21:33,180 --> 00:21:34,500
is that they can make products
466
00:21:34,500 --> 00:21:34,740
that no Western firm
is that they can make products
467
00:21:34,740 --> 00:21:37,220
that no Western firm
has been able to replicate,
468
00:21:37,220 --> 00:21:37,460
that no Western firm
especially when it comes to cost.
469
00:21:37,460 --> 00:21:39,700
especially when it comes to cost.
470
00:21:40,500 --> 00:21:45,340
And without Huawei there is simply
no cost-effective way right now
471
00:21:45,340 --> 00:21:47,860
to build 5G across much of America,
472
00:21:47,860 --> 00:21:50,340
something that lawyer Eric Atria
discovered
473
00:21:50,340 --> 00:21:54,300
when he and his family
moved to rural Florida.
474
00:21:55,260 --> 00:21:56,620
We moved out here
475
00:21:56,620 --> 00:21:59,540
and found out that there literally
wasn't internet out here.
476
00:21:59,540 --> 00:21:59,780
and found out that there literally
We couldn't get any internet.
477
00:21:59,780 --> 00:22:01,220
We couldn't get any internet.
478
00:22:01,220 --> 00:22:01,460
We couldn't get any internet.
And the only place in our yard
that we could actually get
479
00:22:01,460 --> 00:22:03,420
And the only place in our yard
that we could actually get
480
00:22:03,420 --> 00:22:06,380
one bar of service
from our cell phone provider
481
00:22:06,380 --> 00:22:06,620
one bar of service
is this log,
482
00:22:06,620 --> 00:22:07,900
is this log,
483
00:22:07,900 --> 00:22:09,500
so, my wife called it 'logging on'.
484
00:22:09,500 --> 00:22:13,220
And you only get one bar of signal
standing here.
485
00:22:13,220 --> 00:22:15,220
So, my wife was out here
the other day
486
00:22:15,220 --> 00:22:17,740
holding her phone in the air
as a personal hotspot
487
00:22:17,740 --> 00:22:20,980
and her laptop in the other hand
so she could do a work meeting.
488
00:22:24,860 --> 00:22:26,620
(YELLS) Actually not working!
489
00:22:26,620 --> 00:22:31,220
The United States has only built
about 100,000 5G base stations
490
00:22:31,220 --> 00:22:35,500
compared to the over 2 million
in China.
491
00:22:35,500 --> 00:22:37,940
KID: Now it's working!
492
00:22:37,940 --> 00:22:40,340
Why is China so much more successful
493
00:22:40,340 --> 00:22:44,100
at creating
affordable, cutting-edge tech?
494
00:22:44,100 --> 00:22:45,060
VICTOR SEOW: So, historically,
495
00:22:45,060 --> 00:22:49,860
a country's capacity to produce
was itself viewed as innovative.
496
00:22:49,860 --> 00:22:50,140
So, in imperial times,
China's capacity to
a country's capacity to produce
was itself viewed as innovative.
497
00:22:50,140 --> 00:22:52,860
So, in imperial times,
China's capacity to
498
00:22:52,860 --> 00:22:53,140
produce these wonderful goods,
this porcelain, this silk,
So, in imperial times,
China's capacity to
499
00:22:53,140 --> 00:22:56,340
produce these wonderful goods,
this porcelain, this silk,
500
00:22:56,340 --> 00:23:01,420
was inspiring for those who were
able to view them, to see them.
501
00:23:01,420 --> 00:23:01,660
was inspiring for those who were
able to view them, to see them.
And it's only closer to our present
502
00:23:01,660 --> 00:23:04,300
And it's only closer to our present
503
00:23:04,300 --> 00:23:09,060
where we see this distinction
between innovation and production.
504
00:23:10,420 --> 00:23:14,740
Shenzhen is the manufacturing
epicentre of China.
505
00:23:14,740 --> 00:23:18,540
It's also the home town
of most of the Chinese tech giants,
506
00:23:18,540 --> 00:23:20,300
including Huawei.
507
00:23:26,700 --> 00:23:30,100
So, Shenzhen was declared, famously,
by Deng Xiaoping
508
00:23:30,100 --> 00:23:30,380
So, Shenzhen was declared, famously,
by Deng Xiaoping
a 'special economic zone'
in the 1980s.
509
00:23:30,380 --> 00:23:33,620
a 'special economic zone'
in the 1980s.
510
00:23:34,900 --> 00:23:36,580
Before 1979
511
00:23:36,580 --> 00:23:41,500
Shenzhen was a small fishing village
of 30,000 people.
512
00:23:41,500 --> 00:23:45,780
Then it was designated
China's first special economic zone -
513
00:23:45,780 --> 00:23:47,500
an experiment with capitalism
514
00:23:47,500 --> 00:23:50,780
that set it apart from
the centrally planned economic model
515
00:23:50,780 --> 00:23:51,020
that set it apart from
in the rest of the country.
516
00:23:51,020 --> 00:23:52,980
in the rest of the country.
517
00:23:52,980 --> 00:23:54,260
From the beginning
518
00:23:54,260 --> 00:23:59,860
authorities viewed mastery of
manufacturing as key to innovation.
519
00:23:59,860 --> 00:24:00,100
authorities viewed mastery of
Flash forward to today,
520
00:24:00,100 --> 00:24:01,580
Flash forward to today,
521
00:24:01,580 --> 00:24:01,820
Shenzhen is the manufacturing
Flash forward to today,
522
00:24:01,820 --> 00:24:05,820
Shenzhen is the manufacturing
powerhouse of the world.
523
00:24:07,140 --> 00:24:11,660
TRANSLATION: In 1997 there were
many foreign investors here.
524
00:24:11,660 --> 00:24:11,940
TRANSLATION: In 1997 there were
many foreign investors here.
It was the peak
of the 'reform and opening' years.
525
00:24:11,940 --> 00:24:15,260
It was the peak
of the 'reform and opening' years.
526
00:24:15,260 --> 00:24:18,460
Lots of foreign capital
was flowing into China,
527
00:24:18,460 --> 00:24:20,340
and this gave us
lots of opportunities
528
00:24:20,340 --> 00:24:20,580
and this gave us
to learn and improve ourselves.
529
00:24:20,580 --> 00:24:23,300
to learn and improve ourselves.
530
00:24:23,300 --> 00:24:24,780
To walk around Shenzhen
531
00:24:24,780 --> 00:24:27,780
is to see a tech hub
which is very different
532
00:24:27,780 --> 00:24:31,500
from Silicon Valley's
software start-up culture.
533
00:24:31,500 --> 00:24:36,740
At the centre of it all are the
factories and the art of making.
534
00:24:36,740 --> 00:24:38,620
Maker spaces are everywhere,
535
00:24:38,620 --> 00:24:41,020
where people produce, tinker, hack
536
00:24:41,020 --> 00:24:44,260
and, most famously,
copy foreign tech.
537
00:24:44,260 --> 00:24:46,500
DAN WANG: A lot of developing
countries got to be richer
538
00:24:46,500 --> 00:24:49,740
by copying and, indeed, stealing
from advanced countries.
539
00:24:49,740 --> 00:24:49,980
by copying and, indeed, stealing
That was the case
540
00:24:49,980 --> 00:24:51,220
That was the case
541
00:24:51,220 --> 00:24:51,460
when the United States
was a major IP violator
That was the case
542
00:24:51,460 --> 00:24:54,020
when the United States
was a major IP violator
543
00:24:54,020 --> 00:24:56,060
back in the 19th century,
544
00:24:56,060 --> 00:24:56,260
back in the 19th century,
mostly from the United Kingdom.
545
00:24:56,260 --> 00:24:58,100
mostly from the United Kingdom.
546
00:24:59,060 --> 00:25:03,020
Zhang Jiuzhou is a product designer
in Shenzhen.
547
00:25:03,020 --> 00:25:07,580
He challenges the whole idea
of what IP theft means.
548
00:25:07,580 --> 00:25:09,860
(SPEAKS IN OWN LANGUAGE)
549
00:25:09,860 --> 00:25:13,860
TRANSLATION: A lot of people talk
about 'knock-off' products in China,
550
00:25:13,860 --> 00:25:16,420
like all the fake iPhones made here.
551
00:25:16,420 --> 00:25:16,660
like all the fake iPhones made here.
But I see 'knock-off'
as a neutral word,
552
00:25:16,660 --> 00:25:19,700
But I see 'knock-off'
as a neutral word,
553
00:25:19,700 --> 00:25:19,940
But I see 'knock-off'
which means learning and evolving.
554
00:25:19,940 --> 00:25:22,380
which means learning and evolving.
555
00:25:22,380 --> 00:25:22,620
Something that's associated with
intellectual property, with patents,
which means learning and evolving.
556
00:25:22,620 --> 00:25:26,260
Something that's associated with
intellectual property, with patents,
557
00:25:26,260 --> 00:25:29,180
arguably with a very
Western-centric definition
558
00:25:29,180 --> 00:25:29,420
arguably with a very
Western-centric definition
of what counts as innovation,
559
00:25:29,420 --> 00:25:30,940
of what counts as innovation,
560
00:25:30,940 --> 00:25:32,780
which is often rooted in this idea
561
00:25:32,780 --> 00:25:37,540
that there is
an authentic, original,
562
00:25:37,540 --> 00:25:40,060
a charismatic technology creator
563
00:25:40,060 --> 00:25:43,580
who came up with this fantastic,
completely novel idea
564
00:25:43,580 --> 00:25:46,100
that's revolutionising
a whole industry,
565
00:25:46,100 --> 00:25:49,580
and we don't really think
of something like modification
566
00:25:49,580 --> 00:25:49,820
and we don't really think
or slow paced-change as innovation.
567
00:25:49,820 --> 00:25:52,820
or slow paced-change as innovation.
568
00:25:52,820 --> 00:25:54,420
And, so, what I think
is really important
569
00:25:54,420 --> 00:25:57,220
for us to understand
how China innovates
570
00:25:57,220 --> 00:25:59,900
is to rethink what innovation means
in the first place.
571
00:25:59,900 --> 00:26:00,140
is to rethink what innovation means
In my years working in tech in China
572
00:26:00,140 --> 00:26:01,740
In my years working in tech in China
573
00:26:01,740 --> 00:26:05,460
I saw it become
the workshop of the world.
574
00:26:05,460 --> 00:26:09,060
Like a nation of busy chefs, China
was making things at turbo speed,
575
00:26:09,060 --> 00:26:09,300
Like a nation of busy chefs, China
building world-class skills.
576
00:26:09,300 --> 00:26:11,540
building world-class skills.
577
00:26:11,540 --> 00:26:14,580
But then something else
started to happen.
578
00:26:14,580 --> 00:26:14,860
As there was increasing
clustering of manufacturing centres
But then something else
started to happen.
579
00:26:14,860 --> 00:26:19,220
As there was increasing
clustering of manufacturing centres
580
00:26:19,220 --> 00:26:20,940
around different industries,
581
00:26:20,940 --> 00:26:21,140
around different industries,
a lot of learning occurred.
582
00:26:21,140 --> 00:26:22,700
a lot of learning occurred.
583
00:26:22,700 --> 00:26:25,820
I remember
going through a factory in China
584
00:26:25,820 --> 00:26:27,540
and one of the ways
585
00:26:27,540 --> 00:26:30,420
they had been able
to cut the cost of the solar panel
586
00:26:30,420 --> 00:26:34,980
was to figure out a way
to slice the ingot more thinly.
587
00:26:34,980 --> 00:26:40,780
China is masterful at these types
of process innovations,
588
00:26:40,780 --> 00:26:46,660
and, over time, also began to
really gain innovation capabilities.
589
00:26:46,660 --> 00:26:49,580
The spaces
where China has world-leading tech
590
00:26:49,580 --> 00:26:54,140
tend to be the places where China
holds manufacturing dominance.
591
00:26:54,140 --> 00:26:58,700
Chinese battery companies
make 77% of the world's batteries.
592
00:26:58,700 --> 00:27:03,820
China's firms produce 80%
of the components in solar panels.
593
00:27:03,820 --> 00:27:04,060
China's firms produce 80%
Huawei followed a similar path.
594
00:27:04,060 --> 00:27:05,580
Huawei followed a similar path.
595
00:27:05,580 --> 00:27:09,740
After producing telecom equipment
for foreign companies for years,
596
00:27:09,740 --> 00:27:11,380
their manufacturing experience
597
00:27:11,380 --> 00:27:14,300
helped them develop
better and cheaper products.
598
00:27:15,260 --> 00:27:18,700
If China had never become
the workshop of the world,
599
00:27:18,700 --> 00:27:22,500
I doubt we'd even be talking about
Chinese tech giants.
600
00:27:22,500 --> 00:27:25,460
DAN WANG: And a lot of
the manufacturing workforce in China
601
00:27:25,460 --> 00:27:25,700
DAN WANG: And a lot of
has expanded very significantly,
602
00:27:25,700 --> 00:27:28,460
has expanded very significantly,
603
00:27:28,460 --> 00:27:30,020
in part at the expense of the US.
604
00:27:30,020 --> 00:27:32,180
As we see from COVID-19,
605
00:27:32,180 --> 00:27:35,100
a lot of the US manufacturers,
in its early days,
606
00:27:35,100 --> 00:27:39,100
struggled to make something
as simple as masks for people
607
00:27:39,100 --> 00:27:39,340
struggled to make something
as well as cotton swabs for testing.
608
00:27:39,340 --> 00:27:41,580
as well as cotton swabs for testing.
609
00:27:41,580 --> 00:27:43,340
The contrast that we see in China
610
00:27:43,340 --> 00:27:46,740
is that manufacturers
were able to respond really quickly.
611
00:27:49,420 --> 00:27:50,900
Manufacturing dominance
612
00:27:50,900 --> 00:27:55,300
creates spillover advantages
for Chinese entrepreneurs,
613
00:27:55,300 --> 00:27:58,780
advantages
that show up in unexpected places.
614
00:27:59,740 --> 00:28:04,660
TRANSLATION: In 2014
I built a 10-megawatt Bitcoin mine
615
00:28:04,660 --> 00:28:04,900
in the Inner Mongolia province.
I built a 10-megawatt Bitcoin mine
616
00:28:04,900 --> 00:28:07,140
in the Inner Mongolia province.
617
00:28:07,140 --> 00:28:10,700
At that time, it was one of China's
largest facilities.
618
00:28:10,700 --> 00:28:10,940
At that time, it was one of China's
largest facilities.
Now in 2021
619
00:28:10,940 --> 00:28:13,380
Now in 2021
620
00:28:13,380 --> 00:28:18,180
I'm building the same kind
of facility here in the desert...
621
00:28:18,180 --> 00:28:18,420
I'm building the same kind
(SPEAKS IN OWN LANGUAGE)
622
00:28:18,420 --> 00:28:19,900
(SPEAKS IN OWN LANGUAGE)
623
00:28:19,900 --> 00:28:20,140
..except this time around
(SPEAKS IN OWN LANGUAGE)
624
00:28:20,140 --> 00:28:23,740
..except this time around
it's 60 times larger.
625
00:28:23,740 --> 00:28:28,340
It's like coming full circle,
just in a new location.
626
00:28:28,340 --> 00:28:28,580
It's like coming full circle,
Kevin Pan is the CEO of Poolin,
627
00:28:28,580 --> 00:28:30,900
Kevin Pan is the CEO of Poolin,
628
00:28:30,900 --> 00:28:35,100
one of the largest Bitcoin
mining operations in the world.
629
00:28:35,100 --> 00:28:39,020
A Bitcoin mining facility
is similar to a data centre.
630
00:28:39,020 --> 00:28:43,580
Powerful computers operate 24/7
to run the Bitcoin network.
631
00:28:43,580 --> 00:28:44,940
For security
632
00:28:44,940 --> 00:28:45,180
the network depends
For security
633
00:28:45,180 --> 00:28:47,420
the network depends
on the participation of computers
634
00:28:47,420 --> 00:28:48,860
scattered around the world
635
00:28:48,860 --> 00:28:52,420
to collectively keep track
of Bitcoin ownership.
636
00:28:52,420 --> 00:28:54,940
The system issues Bitcoins
to participants
637
00:28:54,940 --> 00:28:59,220
by rewarding those who solve
complex cryptographic puzzles,
638
00:28:59,220 --> 00:29:04,060
an activity that requires
huge amounts of electricity.
639
00:29:04,060 --> 00:29:08,300
Bitcoin mining
was once dominated by US miners,
640
00:29:08,300 --> 00:29:12,940
but, as so often happens,
China was quick to get into the game
641
00:29:12,940 --> 00:29:18,900
and grew to hold as much
as a 75% share of the industry.
642
00:29:18,900 --> 00:29:21,100
I'm especially interested
in asking Kevin
643
00:29:21,100 --> 00:29:27,820
what he thought gave China that edge
in this and in so many other areas.
644
00:29:28,780 --> 00:29:30,540
KEVIN PAN: (TRANSLATION)
It's almost unfathomable
645
00:29:30,540 --> 00:29:32,860
how quick the supply chain
is in Shenzhen.
646
00:29:32,860 --> 00:29:37,300
In America, it takes days to receive
prototypes for your designs.
647
00:29:37,300 --> 00:29:41,620
In Shenzhen, if you send blueprints
to a factory in the morning,
648
00:29:41,620 --> 00:29:44,940
they'll deliver a prototype
by the afternoon.
649
00:29:44,940 --> 00:29:49,380
It's a paradise for any entrepreneur
working with hardware.
650
00:29:49,380 --> 00:29:52,500
In other places you just
can't do this, only in Shenzhen.
651
00:29:54,380 --> 00:29:58,660
Kevin built his massive
Bitcoin operation in China,
652
00:29:58,660 --> 00:30:02,140
and then the hammer came down.
653
00:30:02,140 --> 00:30:05,540
China's central bank
cracked down on cryptocurrencies,
654
00:30:05,540 --> 00:30:09,060
calling all crypto-related activities
illegal.
655
00:30:09,060 --> 00:30:13,140
It happened around the same time
as a wide-ranging tech crackdown
656
00:30:13,140 --> 00:30:17,740
that also hit social-media companies
and online loan providers.
657
00:30:18,740 --> 00:30:20,980
As powerful
as the Chinese government is
658
00:30:20,980 --> 00:30:24,700
when it comes to rapidly deploying
infrastructure like 5G,
659
00:30:24,700 --> 00:30:24,940
when it comes to rapidly deploying
it can be equally harsh,
660
00:30:24,940 --> 00:30:27,220
it can be equally harsh,
661
00:30:27,220 --> 00:30:30,340
and, essentially,
with the same stroke of a pen
662
00:30:30,340 --> 00:30:30,580
and, essentially,
it banned Kevin's entire industry,
663
00:30:30,580 --> 00:30:33,260
it banned Kevin's entire industry,
664
00:30:33,260 --> 00:30:33,500
citing the environmental consequences
it banned Kevin's entire industry,
665
00:30:33,500 --> 00:30:36,940
citing the environmental consequences
of Bitcoin mining.
666
00:30:40,220 --> 00:30:42,460
TRANSLATION:
Ever since we got shut down,
667
00:30:42,460 --> 00:30:47,180
the company's
been in a tough position.
668
00:30:47,180 --> 00:30:47,420
the company's
So, what happened to Kevin?
669
00:30:47,420 --> 00:30:49,660
So, what happened to Kevin?
670
00:30:49,660 --> 00:30:52,100
Turns out
he wasn't about to give up so easily.
671
00:30:52,100 --> 00:30:55,660
He just pulled up stakes
and started over in a new home...
672
00:30:56,620 --> 00:31:00,380
..where he has been welcomed
with open arms.
673
00:31:01,340 --> 00:31:05,660
I love Bitcoin because
it's bringing freedom to people.
674
00:31:05,660 --> 00:31:05,900
I love Bitcoin because
You can protect your own assets
675
00:31:05,900 --> 00:31:07,780
You can protect your own assets
676
00:31:07,780 --> 00:31:12,300
and nobody want...nobody could
ever, ever, could take it from you.
677
00:31:12,300 --> 00:31:12,540
and nobody want...nobody could
So, where does it actually exist?
678
00:31:12,540 --> 00:31:15,300
So, where does it actually exist?
679
00:31:15,300 --> 00:31:17,740
It's on the internet.
680
00:31:17,740 --> 00:31:20,700
Kevin's not alone in jumping ship.
681
00:31:20,700 --> 00:31:23,900
Many entrepreneurs
caught in Chinese tech crackdowns
682
00:31:23,900 --> 00:31:24,140
Many entrepreneurs
have relocated to America.
683
00:31:24,140 --> 00:31:26,380
have relocated to America.
684
00:31:26,380 --> 00:31:28,100
They're here
because the Chinese government
685
00:31:28,100 --> 00:31:31,340
takes an active role
in steering innovation.
686
00:31:31,340 --> 00:31:31,580
takes an active role
Policymakers funnel talent and money
687
00:31:31,580 --> 00:31:34,540
Policymakers funnel talent and money
688
00:31:34,540 --> 00:31:37,540
into industries
they view as important.
689
00:31:37,540 --> 00:31:38,820
At the same time
690
00:31:38,820 --> 00:31:44,180
they shut down industries they view
as wasteful, risky or frivolous.
691
00:31:50,620 --> 00:31:52,540
KEVIN PAN: (TRANSLATION)
When China shut us down,
692
00:31:52,540 --> 00:31:55,580
we immediately
complied with the law.
693
00:31:55,580 --> 00:31:55,820
we immediately
But in our hearts we felt hopeless.
694
00:31:55,820 --> 00:31:59,380
But in our hearts we felt hopeless.
695
00:31:59,380 --> 00:32:02,820
We spent so long building so much,
696
00:32:02,820 --> 00:32:03,060
and it was all torn down
We spent so long building so much,
697
00:32:03,060 --> 00:32:06,540
and it was all torn down
in a single night.
698
00:32:06,540 --> 00:32:09,780
We either had to give up
or start from scratch.
699
00:32:12,260 --> 00:32:14,980
Today
Kevin and his team of Bitcoin miners
700
00:32:14,980 --> 00:32:15,220
Today
are meeting with Kenneth Winkles...
701
00:32:15,220 --> 00:32:16,900
are meeting with Kenneth Winkles...
702
00:32:16,900 --> 00:32:18,020
Kevin, good morning!
703
00:32:18,020 --> 00:32:21,340
..head of a local
economic development organisation.
704
00:32:21,340 --> 00:32:22,500
Good to see you again, sir.
705
00:32:22,500 --> 00:32:25,580
How many total megawatts
will you be utilising
706
00:32:25,580 --> 00:32:25,820
How many total megawatts
once you're up and running?
707
00:32:25,820 --> 00:32:27,500
once you're up and running?
708
00:32:27,500 --> 00:32:27,740
Yeah, phase one
once you're up and running?
709
00:32:27,740 --> 00:32:29,980
Yeah, phase one
is about 100 megawatts.
710
00:32:29,980 --> 00:32:30,860
OK.
711
00:32:30,860 --> 00:32:33,980
I don't believe
that what happened in China
712
00:32:33,980 --> 00:32:34,220
I don't believe
will happen in the United States.
713
00:32:34,220 --> 00:32:35,460
will happen in the United States.
714
00:32:35,460 --> 00:32:35,660
I really don't.
will happen in the United States.
715
00:32:35,660 --> 00:32:36,580
I really don't.
716
00:32:36,580 --> 00:32:36,780
I really don't.
We've got a very stable
717
00:32:36,780 --> 00:32:38,780
We've got a very stable
718
00:32:38,780 --> 00:32:38,980
type of government,
We've got a very stable
719
00:32:38,980 --> 00:32:40,020
type of government,
720
00:32:40,020 --> 00:32:42,020
whether you're a red
or a blue state.
721
00:32:42,020 --> 00:32:43,260
You happen to be in a red state.
722
00:32:43,260 --> 00:32:43,460
You happen to be in a red state.
Texas is business-friendly,
723
00:32:43,460 --> 00:32:45,060
Texas is business-friendly,
724
00:32:45,060 --> 00:32:48,140
so, you're not going to see somebody
come in and say,
725
00:32:48,140 --> 00:32:51,100
"No, you can't do that
in my backyard."
726
00:32:51,100 --> 00:32:51,820
Yeah.
OK.
727
00:32:51,820 --> 00:32:52,060
Yeah.
Crypto was banned in China
728
00:32:52,060 --> 00:32:54,620
Crypto was banned in China
729
00:32:54,620 --> 00:32:57,940
because the Chinese state
uses its strong central authority
730
00:32:57,940 --> 00:33:00,980
to guide innovation as it sees fit.
731
00:33:00,980 --> 00:33:04,820
But is it just driving out the
disruptors and original thinkers
732
00:33:04,820 --> 00:33:05,060
But is it just driving out the
needed to foster true innovation?
733
00:33:05,060 --> 00:33:08,340
needed to foster true innovation?
734
00:33:08,340 --> 00:33:11,340
There's no shortage
of strong opinions.
735
00:33:11,340 --> 00:33:11,620
I've seen many times
in Chinese bookstores,
There's no shortage
of strong opinions.
736
00:33:11,620 --> 00:33:13,380
I've seen many times
in Chinese bookstores,
737
00:33:13,380 --> 00:33:15,460
there are many, many books
in those bookstores that say,
738
00:33:15,460 --> 00:33:15,700
there are many, many books
"Where is China's Steve Jobs?"
739
00:33:15,700 --> 00:33:17,460
"Where is China's Steve Jobs?"
740
00:33:17,460 --> 00:33:17,700
And this is a question
"Where is China's Steve Jobs?"
741
00:33:17,700 --> 00:33:20,020
And this is a question
that China itself is asking.
742
00:33:20,020 --> 00:33:20,260
And this is a question
that China itself is asking.
And, so, I do believe, ultimately,
743
00:33:20,260 --> 00:33:21,940
And, so, I do believe, ultimately,
744
00:33:21,940 --> 00:33:24,940
that it's the combination
of the American free market
745
00:33:24,940 --> 00:33:25,180
that it's the combination
with our democratic system
746
00:33:25,180 --> 00:33:26,420
with our democratic system
747
00:33:26,420 --> 00:33:26,660
that ultimately
with our democratic system
748
00:33:26,660 --> 00:33:28,900
that ultimately
is best for fostering innovation.
749
00:33:28,900 --> 00:33:31,420
Beijing's vision
of the technological future
750
00:33:31,420 --> 00:33:33,860
is a little bit different
from California's.
751
00:33:33,860 --> 00:33:35,580
In its view,
a lot of social-media companies
752
00:33:35,580 --> 00:33:38,300
are actually creating
a lot of social unrest.
753
00:33:38,300 --> 00:33:41,620
And, frankly, it doesn't see
a great use for cryptocurrency,
754
00:33:41,620 --> 00:33:45,300
which is almost explicitly designed
to be out of state control.
755
00:33:45,300 --> 00:33:45,580
There are certainly efforts
by the government
which is almost explicitly designed
to be out of state control.
756
00:33:45,580 --> 00:33:47,900
There are certainly efforts
by the government
757
00:33:47,900 --> 00:33:49,540
to redirect talent and capital
758
00:33:49,540 --> 00:33:52,940
toward so-called 'hard tech' sectors
759
00:33:52,940 --> 00:33:53,180
toward so-called 'hard tech' sectors
such as climate tech,
such as electric vehicles, etcetera.
760
00:33:53,180 --> 00:33:57,500
such as climate tech,
such as electric vehicles, etcetera.
761
00:33:58,460 --> 00:34:03,460
China's government guides innovation
into areas that it deems important.
762
00:34:03,460 --> 00:34:08,300
But can a single institution
always choose the right winners?
763
00:34:08,300 --> 00:34:08,540
But can a single institution
Either way,
764
00:34:08,540 --> 00:34:09,300
Either way,
765
00:34:09,300 --> 00:34:09,540
it does seem to be working
Either way,
766
00:34:09,540 --> 00:34:13,100
it does seem to be working
for a number of key industries,
767
00:34:13,100 --> 00:34:16,220
and the Chinese model
of a heavier state hand
768
00:34:16,220 --> 00:34:19,180
seems to be gaining influence
worldwide.
769
00:34:20,140 --> 00:34:23,100
The challenge
of competing with China
770
00:34:23,100 --> 00:34:23,340
The challenge
has caused people to reassess
771
00:34:23,340 --> 00:34:25,060
has caused people to reassess
772
00:34:25,060 --> 00:34:28,740
whether the market alone
can create and mobilise
773
00:34:28,740 --> 00:34:31,260
the resources for innovation
in the United States.
774
00:34:31,260 --> 00:34:33,580
And the belief, I think,
is that it can't,
775
00:34:33,580 --> 00:34:37,220
especially when you're competing
with a country where the government
776
00:34:37,220 --> 00:34:41,580
has been able to mobilise such vast
sums of resources in the same areas.
777
00:34:41,580 --> 00:34:45,540
And, so, the US government
has put its own thumb on the scale
778
00:34:45,540 --> 00:34:48,940
with the 2022 passage
of the CHIPS and Science Act
779
00:34:48,940 --> 00:34:53,020
injecting public money
into the semiconductor industry.
780
00:34:53,980 --> 00:34:58,580
Today's computer chips are easily
the most complex devices ever made,
781
00:34:58,580 --> 00:35:02,900
and they're also seen now
as a critical strategic resource.
782
00:35:02,900 --> 00:35:05,140
Besides trying to jumpstart
domestic production,
783
00:35:05,140 --> 00:35:06,660
the US and the West
784
00:35:06,660 --> 00:35:12,100
are also trying to keep the means
of production out of China's hands.
785
00:35:13,220 --> 00:35:14,980
DAN WANG:
Without advanced semiconductors
786
00:35:14,980 --> 00:35:19,540
there is no way that China can have
a thriving technological industry.
787
00:35:19,540 --> 00:35:23,260
China is now out of
the starting gate in semiconductors,
788
00:35:23,260 --> 00:35:24,780
but, in the most rosy view,
789
00:35:24,780 --> 00:35:28,860
it is probably
at least 5 to 15 years behind the US
790
00:35:28,860 --> 00:35:32,100
in terms of the most crucial
semiconductor technologies.
791
00:35:33,060 --> 00:35:35,940
Computer chips
are solid pieces of silicon and metal
792
00:35:35,940 --> 00:35:39,380
with literally billions
of tiny electronic switches
793
00:35:39,380 --> 00:35:39,620
with literally billions
packed into a very small space.
794
00:35:39,620 --> 00:35:42,380
packed into a very small space.
795
00:35:42,380 --> 00:35:44,100
Since the 1970s
796
00:35:44,100 --> 00:35:47,460
the key to increasing
the power and speed of computers
797
00:35:47,460 --> 00:35:51,820
has been tied directly
to the density of those switches.
798
00:35:51,820 --> 00:35:54,900
As they've shrunk down
to the atomic scale,
799
00:35:54,900 --> 00:35:56,380
the technology required to make them
800
00:35:56,380 --> 00:35:59,700
has become
increasingly costly and complex.
801
00:35:59,700 --> 00:36:02,140
Pushing the envelope
of chip innovation
802
00:36:02,140 --> 00:36:03,740
is like building a pyramid -
803
00:36:03,740 --> 00:36:06,140
everything rests on what came below,
804
00:36:06,140 --> 00:36:10,020
and China's pyramid
is really just getting started.
805
00:36:11,260 --> 00:36:14,700
JAMES MULVENON: One of the most
dramatic consequences
806
00:36:14,700 --> 00:36:14,940
JAMES MULVENON: One of the most
of the trade war with China
807
00:36:14,940 --> 00:36:16,580
of the trade war with China
808
00:36:16,580 --> 00:36:19,820
was the exposure
of China's dependence
809
00:36:19,820 --> 00:36:23,900
on high-quality and high-end
semiconductor chips
810
00:36:23,900 --> 00:36:27,180
from the United States and Japan
and Korea and Taiwan.
811
00:36:27,180 --> 00:36:30,940
And, I would say, right now that
catch-up in the semiconductor space
812
00:36:30,940 --> 00:36:33,820
is probably
the single greatest challenge
813
00:36:33,820 --> 00:36:36,540
that the Chinese technology sphere
currently faces
814
00:36:36,540 --> 00:36:38,860
and the highest hill
that they have to climb.
815
00:36:40,420 --> 00:36:43,220
This is a Huawei cell-phone factory.
816
00:36:43,220 --> 00:36:44,220
Just a few years ago
817
00:36:44,220 --> 00:36:47,540
Huawei was on track to become
the leading maker of mobile phones
818
00:36:47,540 --> 00:36:47,780
Huawei was on track to become
in the world.
819
00:36:47,780 --> 00:36:49,300
in the world.
820
00:36:49,300 --> 00:36:55,740
Then the US government cut off their
access to advanced semiconductors.
821
00:36:55,740 --> 00:36:57,980
DAN WANG: Huawei
has had a lot of different problems
822
00:36:57,980 --> 00:37:00,260
with trying to maintain production.
823
00:37:00,260 --> 00:37:03,780
There's simply no way
to be a major technology provider
824
00:37:03,780 --> 00:37:07,020
if you don't have the most advanced
semiconductors in the world.
825
00:37:07,020 --> 00:37:07,300
if you don't have the most advanced
semiconductors in the world.
And, so, at this point,
Huawei's revenues have collapsed
826
00:37:07,300 --> 00:37:09,780
And, so, at this point,
Huawei's revenues have collapsed
827
00:37:09,780 --> 00:37:12,900
mostly because its smartphone
business has collapsed.
828
00:37:12,900 --> 00:37:13,140
mostly because its smartphone
It was for one period
829
00:37:13,140 --> 00:37:15,020
It was for one period
830
00:37:15,020 --> 00:37:15,260
the second-largest smartphone maker
It was for one period
831
00:37:15,260 --> 00:37:17,500
the second-largest smartphone maker
in the world.
832
00:37:17,500 --> 00:37:19,740
Today, it is just barely
in the running
833
00:37:19,740 --> 00:37:22,940
for being the top-10 largest
smartphone makers in the world.
834
00:37:24,420 --> 00:37:26,020
In Chandler, Arizona,
835
00:37:26,020 --> 00:37:28,500
I visit an Intel
semiconductor factory,
836
00:37:28,500 --> 00:37:28,740
I visit an Intel
also known as a 'fab'.
837
00:37:28,740 --> 00:37:30,980
also known as a 'fab'.
838
00:37:33,020 --> 00:37:37,060
Here Intel is building
a new state-of-the-art facility.
839
00:37:39,580 --> 00:37:43,580
If any one place represents
the front line of the tech war today
840
00:37:43,580 --> 00:37:43,820
If any one place represents
this is it.
841
00:37:43,820 --> 00:37:45,260
this is it.
842
00:37:45,260 --> 00:37:45,460
Welcome to Fab 42.
this is it.
843
00:37:45,460 --> 00:37:47,380
Welcome to Fab 42.
844
00:37:48,340 --> 00:37:52,180
You're in one of Intel's
most advanced factories.
845
00:37:53,140 --> 00:37:56,180
Very large outfit here that we run
846
00:37:56,180 --> 00:38:00,420
with a lot of different people
doing various activities.
847
00:38:00,420 --> 00:38:05,220
Semiconductors process the data
that run through digital devices.
848
00:38:05,220 --> 00:38:08,380
HUGH GREEN: We start our process
with a bare silicon wafer.
849
00:38:08,380 --> 00:38:12,460
It looks like a pizza,
300 millimetres in diameter.
850
00:38:13,420 --> 00:38:14,900
Digital electronics work
851
00:38:14,900 --> 00:38:18,980
by processing our voice, the videos
we watch and the data we collect
852
00:38:18,980 --> 00:38:23,940
into a binary code
that can be transmitted between us.
853
00:38:23,940 --> 00:38:26,820
This is the language
of computers and the internet.
854
00:38:27,780 --> 00:38:32,460
What creates this code
are switches called 'transistors'.
855
00:38:32,460 --> 00:38:36,140
At the heart of computers today
are tiny wafers of silicon
856
00:38:36,140 --> 00:38:39,420
that can hold
more than 100 billion transistors
857
00:38:39,420 --> 00:38:39,660
that can hold
in just a few square centimetres.
858
00:38:39,660 --> 00:38:42,300
in just a few square centimetres.
859
00:38:44,140 --> 00:38:48,460
The switches of today's computers
are only a few atoms wide,
860
00:38:48,460 --> 00:38:51,340
only visible
under an electron microscope.
861
00:38:51,340 --> 00:38:53,940
Arranged by millions
of minuscule networks,
862
00:38:53,940 --> 00:38:58,420
they look like farmland
viewed from 30,000 feet.
863
00:38:58,420 --> 00:39:01,540
The connections between them
are just as tiny.
864
00:39:01,540 --> 00:39:01,820
On this package itself
there are 1.1 million interconnects.
The connections between them
are just as tiny.
865
00:39:01,820 --> 00:39:06,180
On this package itself
there are 1.1 million interconnects.
866
00:39:06,180 --> 00:39:07,620
And of those interconnects
867
00:39:07,620 --> 00:39:07,860
And of those interconnects
about 980,000 of those interconnects
are at Intel state-of-the-art.
868
00:39:07,860 --> 00:39:11,940
about 980,000 of those interconnects
are at Intel state-of-the-art.
869
00:39:11,940 --> 00:39:14,820
Each new generation
of fabrication machinery
870
00:39:14,820 --> 00:39:15,060
Each new generation
is an advance on what came before it.
871
00:39:15,060 --> 00:39:17,300
is an advance on what came before it.
872
00:39:18,220 --> 00:39:19,980
Starting in the 1970s,
873
00:39:19,980 --> 00:39:24,260
Moore's law predicted that chip
technology would improve so rapidly
874
00:39:24,260 --> 00:39:29,340
that the number of transistors on
a chip would double every 18 months.
875
00:39:29,340 --> 00:39:29,580
that the number of transistors on
This has held mostly true so far,
876
00:39:29,580 --> 00:39:32,220
This has held mostly true so far,
877
00:39:32,220 --> 00:39:32,460
making it almost impossible
This has held mostly true so far,
878
00:39:32,460 --> 00:39:36,860
making it almost impossible
for newcomers to the game to catch up
879
00:39:36,860 --> 00:39:37,100
making it almost impossible
without relying on equipment
880
00:39:37,100 --> 00:39:38,460
without relying on equipment
881
00:39:38,460 --> 00:39:42,980
produced by just a few
standard-setting companies.
882
00:39:42,980 --> 00:39:45,220
KEYVAN ESFARJANI: Imagine
you have billions of transistors
883
00:39:45,220 --> 00:39:46,620
on a...you know, your fingernail.
884
00:39:46,620 --> 00:39:48,420
If a small defect -
885
00:39:48,420 --> 00:39:53,620
and I mean small defects being like
a size of a molecule or even a DNA -
886
00:39:53,620 --> 00:39:53,860
and I mean small defects being like
a size of a molecule or even a DNA -
the whole thing breaks apart.
887
00:39:53,860 --> 00:39:55,380
the whole thing breaks apart.
888
00:39:55,380 --> 00:39:56,740
It's not a stretch to say
889
00:39:56,740 --> 00:39:59,500
that here
the US is relearning a lesson
890
00:39:59,500 --> 00:39:59,740
that here
that China is already committed to.
891
00:39:59,740 --> 00:40:02,100
that China is already committed to.
892
00:40:02,100 --> 00:40:02,340
It's a reminder
that China is already committed to.
893
00:40:02,340 --> 00:40:04,900
It's a reminder
of what America may have lost
894
00:40:04,900 --> 00:40:08,820
in allowing the decline
of its own manufacturing sector,
895
00:40:08,820 --> 00:40:13,860
but it's also a testament
to some of America's strengths.
896
00:40:13,860 --> 00:40:14,140
You have about 100 PhDs
working in this facility,
but it's also a testament
to some of America's strengths.
897
00:40:14,140 --> 00:40:17,220
You have about 100 PhDs
working in this facility,
898
00:40:17,220 --> 00:40:17,460
You have about 100 PhDs
and we do care about diversity -
899
00:40:17,460 --> 00:40:19,340
and we do care about diversity -
900
00:40:19,340 --> 00:40:20,580
diversity of thought,
901
00:40:20,580 --> 00:40:20,820
diversity of thought,
diversity of opinion,
diversity of views.
902
00:40:20,820 --> 00:40:23,980
diversity of opinion,
diversity of views.
903
00:40:23,980 --> 00:40:25,340
As I look around
904
00:40:25,340 --> 00:40:29,140
I see top scientists
from many countries working here.
905
00:40:29,140 --> 00:40:32,740
They come from Europe, India
and even China
906
00:40:32,740 --> 00:40:37,740
to provide different perspectives
on how to solve difficult problems.
907
00:40:37,740 --> 00:40:41,300
This is something that I never
really saw in Chinese research labs,
908
00:40:41,300 --> 00:40:41,540
This is something that I never
and it's one of the many reasons
909
00:40:41,540 --> 00:40:43,100
and it's one of the many reasons
910
00:40:43,100 --> 00:40:46,860
why Chinese companies
are having such a difficult time
911
00:40:46,860 --> 00:40:49,100
catching up in semiconductors.
912
00:40:51,860 --> 00:40:53,260
In this facility
913
00:40:53,260 --> 00:40:53,500
the most cutting-edge lithography
In this facility
914
00:40:53,500 --> 00:40:57,020
the most cutting-edge lithography
machines are from the Netherlands,
915
00:40:57,020 --> 00:40:57,260
the most cutting-edge lithography
the chip designs are from California,
916
00:40:57,260 --> 00:40:59,900
the chip designs are from California,
917
00:40:59,900 --> 00:41:04,140
minerals for chip-making processes
come from all over the world.
918
00:41:04,140 --> 00:41:07,500
Producing something as complicated
as a semiconductor
919
00:41:07,500 --> 00:41:10,260
requires international cooperation.
920
00:41:10,260 --> 00:41:13,780
There isn't a country in the world
that can do it alone.
921
00:41:13,780 --> 00:41:14,020
There isn't a country in the world
But now China will have to try.
922
00:41:14,020 --> 00:41:16,700
But now China will have to try.
923
00:41:18,140 --> 00:41:23,300
In late 2022 the US government
expanded its tech war on China.
924
00:41:23,300 --> 00:41:23,540
In late 2022 the US government
New regulations
925
00:41:23,540 --> 00:41:24,860
New regulations
926
00:41:24,860 --> 00:41:29,220
forced all Americans working in
the semiconductor industry in China
927
00:41:29,220 --> 00:41:32,060
to resign
or renounce their citizenship.
928
00:41:32,060 --> 00:41:35,380
The restrictions
are only expanding in scope.
929
00:41:35,380 --> 00:41:39,180
What started as an attempt
to choke select companies like Huawei
930
00:41:39,180 --> 00:41:44,140
seems to be expanding
to the entire Chinese tech sector.
931
00:41:44,140 --> 00:41:44,420
It was a very comprehensive
set of rules
seems to be expanding
to the entire Chinese tech sector.
932
00:41:44,420 --> 00:41:47,700
It was a very comprehensive
set of rules
933
00:41:47,700 --> 00:41:47,940
It was a very comprehensive
designed really to allow the US
934
00:41:47,940 --> 00:41:50,860
designed really to allow the US
935
00:41:50,860 --> 00:41:51,100
designed really to allow the US
to control just exactly
what capability China would have
936
00:41:51,100 --> 00:41:56,060
to control just exactly
what capability China would have
937
00:41:56,060 --> 00:41:58,300
across the semiconductor
manufacturing space.
938
00:41:58,300 --> 00:42:04,180
And, so, China faces
a really significant problem.
939
00:42:04,180 --> 00:42:09,180
No country has ever attempted
to recreate, for example,
940
00:42:09,180 --> 00:42:13,140
all the pieces of the semiconductor
manufacturing supply chain
941
00:42:13,140 --> 00:42:13,380
all the pieces of the semiconductor
on its own.
942
00:42:13,380 --> 00:42:14,180
on its own.
943
00:42:15,140 --> 00:42:16,820
Back at Huawei
944
00:42:16,820 --> 00:42:19,380
the company is on a war footing.
945
00:42:19,380 --> 00:42:22,660
Cut off from the technology it needs
to power their products,
946
00:42:22,660 --> 00:42:22,900
Cut off from the technology it needs
they know they need to move fast.
947
00:42:22,900 --> 00:42:25,460
they know they need to move fast.
948
00:42:25,460 --> 00:42:25,700
The way the Chinese typically
respond to efforts like that
they know they need to move fast.
949
00:42:25,700 --> 00:42:29,060
The way the Chinese typically
respond to efforts like that
950
00:42:29,060 --> 00:42:32,980
is they redouble their efforts
to innovate internally.
951
00:42:32,980 --> 00:42:33,220
is they redouble their efforts
(SPEAKS IN OWN LANGUAGE)
952
00:42:33,220 --> 00:42:34,260
(SPEAKS IN OWN LANGUAGE)
953
00:42:34,260 --> 00:42:35,580
TRANSLATION: As you may know,
954
00:42:35,580 --> 00:42:38,500
our supply of semiconductors
was choked off.
955
00:42:38,500 --> 00:42:38,740
our supply of semiconductors
was choked off.
We can't make them.
956
00:42:38,740 --> 00:42:41,700
We can't make them.
957
00:42:41,700 --> 00:42:43,020
But I can feel it -
958
00:42:43,020 --> 00:42:47,300
the whole of society is working
to find a way out of this problem.
959
00:42:47,300 --> 00:42:51,180
Of course, here in this lab,
we are focused on our own problems.
960
00:42:51,180 --> 00:42:54,380
But you could say we're working
on the fundamental problem
961
00:42:54,380 --> 00:42:54,620
But you could say we're working
this country faces.
962
00:42:54,620 --> 00:42:56,060
this country faces.
963
00:42:57,940 --> 00:43:01,620
How do we get around the pressure
that has been put on us?
964
00:43:01,620 --> 00:43:01,860
How do we get around the pressure
(SPEAKS IN OWN LANGUAGE)
965
00:43:01,860 --> 00:43:03,420
(SPEAKS IN OWN LANGUAGE)
966
00:43:03,420 --> 00:43:08,220
Is another route possible
that doesn't rely on semiconductors?
967
00:43:09,180 --> 00:43:11,380
In the Huawei R and D labs
968
00:43:11,380 --> 00:43:14,300
researchers study how to use light
to process data
969
00:43:14,300 --> 00:43:14,540
researchers study how to use light
rather than using traditional chips.
970
00:43:14,540 --> 00:43:17,020
rather than using traditional chips.
971
00:43:17,020 --> 00:43:17,260
Losing access
rather than using traditional chips.
972
00:43:17,260 --> 00:43:19,980
Losing access
to the most cutting-edge chips
973
00:43:19,980 --> 00:43:20,220
Losing access
has slowed down the progress
974
00:43:20,220 --> 00:43:21,540
has slowed down the progress
975
00:43:21,540 --> 00:43:25,100
of many of the most prominent
Chinese tech giants.
976
00:43:26,060 --> 00:43:28,700
Or has it lit a fire?
977
00:43:28,700 --> 00:43:30,620
In August 2023
978
00:43:30,620 --> 00:43:32,380
Huawei stunned the world
979
00:43:32,380 --> 00:43:32,620
by announcing a new phone
Huawei stunned the world
980
00:43:32,620 --> 00:43:37,180
by announcing a new phone
with a 7-nanometre Chinese-made chip,
981
00:43:37,180 --> 00:43:42,940
more advanced than anything anyone
thought China could make so quickly.
982
00:43:42,940 --> 00:43:47,100
It was a real morale boost
for the Chinese tech sector.
983
00:43:51,940 --> 00:43:54,820
GAO JIALIN:(TRANSLATION)
China is trying to be held back.
984
00:43:54,820 --> 00:43:58,700
But we will innovate ourselves
out of the problem.
985
00:43:58,700 --> 00:44:02,700
The rise of Chinese tech giants
has changed the world.
986
00:44:02,700 --> 00:44:07,260
China's model of innovation
created world-leading companies.
987
00:44:07,260 --> 00:44:11,660
While many insist that China
did not come by these gains honestly,
988
00:44:11,660 --> 00:44:15,380
relying on intellectual property
theft and predatory pricing,
989
00:44:15,380 --> 00:44:15,620
relying on intellectual property
they still did it.
990
00:44:15,620 --> 00:44:17,340
they still did it.
991
00:44:17,340 --> 00:44:17,580
And they did it with a different
they still did it.
992
00:44:17,580 --> 00:44:20,780
And they did it with a different
ethos and manufacturing focus
993
00:44:20,780 --> 00:44:25,580
that challenges expectations
of how innovation happens.
994
00:44:25,580 --> 00:44:27,580
They rose
in the time of globalisation,
995
00:44:27,580 --> 00:44:30,900
but their very ascent
triggered a tech war.
996
00:44:30,900 --> 00:44:32,220
KELLY SIMS GALLAGHER:
Trying to hamstring
997
00:44:32,220 --> 00:44:32,460
KELLY SIMS GALLAGHER:
China's ability to innovate
998
00:44:32,460 --> 00:44:33,900
China's ability to innovate
999
00:44:33,900 --> 00:44:37,700
is really the wrong answer
to the question.
1000
00:44:37,700 --> 00:44:40,820
And if the question is, "How
can the US become more competitive?"
1001
00:44:40,820 --> 00:44:44,540
it needs to get
its own house in order and compete.
1002
00:44:47,900 --> 00:44:50,740
(YELLS) Mum! It's not working!
1003
00:44:50,740 --> 00:44:50,980
PAUL TRIOLO: The reason
(YELLS) Mum! It's not working!
1004
00:44:50,980 --> 00:44:52,980
PAUL TRIOLO: The reason
you can have that iPhone
1005
00:44:52,980 --> 00:44:53,220
PAUL TRIOLO: The reason
with so much capability in your hand
1006
00:44:53,220 --> 00:44:55,580
with so much capability in your hand
1007
00:44:55,580 --> 00:44:57,500
IS the result of globalisation.
1008
00:44:57,500 --> 00:44:57,740
So, that iPhone represents parts
IS the result of globalisation.
1009
00:44:57,740 --> 00:45:02,020
So, that iPhone represents parts
coming from all over the world.
1010
00:45:02,020 --> 00:45:04,540
So, what we've seen
over the last two years
1011
00:45:04,540 --> 00:45:07,060
is, essentially,
a reversal of that process.
1012
00:45:07,060 --> 00:45:07,300
is, essentially,
What comes next? I don't know.
1013
00:45:07,300 --> 00:45:09,300
What comes next? I don't know.
1014
00:45:09,300 --> 00:45:09,540
But I believe that Chinese technology
What comes next? I don't know.
1015
00:45:09,540 --> 00:45:13,820
But I believe that Chinese technology
will continue to change the world,
1016
00:45:13,820 --> 00:45:16,340
for better or worse.
1017
00:45:20,660 --> 00:45:22,700
(THEME MUSIC PLAYS)
1018
00:45:37,940 --> 00:45:39,940
Captions by Red Bee Media
1019
00:45:39,940 --> 00:45:42,140
Copyright
Australian Broadcasting Corporation