Winning the trade war

[Bloomberg] [Fully Charged]( From [Bloomberg](   [FOLLOW US [Facebook Share]]( [Twitter Share]( [SUBSCRIBE [Subscribe]](  Hello, it's Ian King. I cover the semiconductor industry. Intel Corp. executives used to boast that each new product they introduced would be obsolete and replaced within a year. Because this is an industry where it costs tens of millions of dollars just to design something, by the time you’re into production the bill is into the hundreds of millions. Intel used the story of towering costs to ward off potential rivals. The company's competitors needed to spend a fortune and be prepared to move at breakneck speed to stand a chance. Indeed, Intel has had a market share of more than 80% for years, a dominance that in other spheres would perhaps lead to slowing things down, cutting costs and maximizing profits. But the industry that gave Silicon Valley its name is always in a hurry and so is the rest of the technology business. From companies like Intel with more than 100,000 employees to the smallest startup in San Francisco, the culture of speed and change is imbued even in the language. Everything is being "disrupted" or "reimagined." The fundamental belief is that things can be made better if you have the right piece of technology that makes things easier, speedier. Contrast that with the U.S. government's current campaign against China's Huawei Technologies Co. The attack on Huawei and Chinese trade is old school, assuming there’s an economic motivation and it’s not purely security based. These types of tariffs and exclusion orders were key tools of mercantilism, the prevailing approach to international trade from the 16th to the 18th century. There’s only so much wealth in the world, the thinking went, so you need to grab as big a chunk as you can at the expense of your rivals. Tech doesn’t work and think like that. It wants to open up new markets, rather than clawing out a bit more of someone else's share. It’s no coincidence the two most prominent figures in technology right now, Elon Musk and Jeff Bezos, are building businesses with ambitions literally out of this world. The business of space is being reimagined by Blue Origin LLC and Space Exploration Technologies Corp. In large part they’re stepping into a gap left by the perceived lack of interest and progress by the U.S. government. So far, China's bureaucracy and government inefficiency has generally been cited as the reason the country has failed to develop some of the fundamental technologies that would make it truly independent. The country’s institutions and companies rely on imports of semiconductors and other crucial components because those industries just haven’t learned to move fast enough mired in an entrenched system, according to the country’s critics. But you don’t have to imagine what might happen if the trade war makes China feel threatened and cut off — we’ve already seen it. In South Korea and Taiwan, the governments created a sense of collective struggle and external threat to fuel state-directed capitalism in the face of economic challenges. They chose and nurtured business groups that became national champions and gave them access to capital to invest as quickly as they could. China already has a world-class company capable of taking on Apple Inc. in smartphones, Cisco Systems Inc. in networking and that’s making rapid inroads in chips. It’s called Huawei. Imagine how much harder its engineers are working now that they’re being told their company is under threat. And a government that allegedly already has close ties with it might just get out of its way.—[Ian King](mailto:ianking@bloomberg.net)  And here’s what you need to know in global technology news Unhappy Facebook Inc. [investors]( have introduced a record number of measures to change the company's corporate structure at Thursday's annual shareholders' meeting. Those measures, however, will run up against Chief Executive Officer Mark Zuckerberg's overwhelming control of the company.  Zuckerberg has a lot of people [mad at him.]( A group of legislators from Canada, the U.K. and elsewhere criticized the Facebook chief for failing to appear before them to talk about privacy.  Apple updated its iPod Touch, a long-overshadowed [product]( that the company hopes will bolster its push into services such as gaming and video.    You received this message because you are subscribed to the Bloomberg Technology newsletter Fully Charged. You can tell your friends to [sign up here](.  [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022