Behind the global share market correction, by Robert Gottliebsen.
We are watching a major correction in equity values across the globe. It’s important to understand the inner forces that have created this fall (not just the US-China trade war) and then look at where these forces might take us. …
Artificial intelligence (AI) is going to propel the technology development of nations and those that succeed in the AI game will be the global winners. The US suddenly realised that in the database/AI war China was not only winning but was set to dominate the world, with enormous implications for defence.
The US bans on Huawei are an essential part of curbing China dominance. And because data and communication gets to the core of what this trade war is really about, the issues are hard to solve.
The decline on Wall Street may cause President Trump to blink and step back and calm nerves by easing the war via a deal with China’s President Xi Jinping.
But if Trump is returned to the presidency next year, in my view the world is headed into an era that sees the disintegration of the rules-based trade system that has governed international commerce since the end of the World War II.
The US and China will develop their own database-driven AI systems, standards, technology platforms and payment systems.
We will never know but had Bill Shorten won the election we may have ended up in the China system. Scott Morrison looks like taking Australia into the US system and you can see that in the defence discussions. Nothing at this stage is set in stone.
It is likely that the UK will leave Europe and form a trade alliance with the US that will involve Australia.
Europe could go either way. …
The Hong Kong economy is in meltdown. China either steps back and allows the protesters to clearly win this round or it steps in. My reading of President Xi is that he will step in but he will wait until there is chaos. …
Finally, if Trump is re-elected president and we are to go into the US data zone then Amazon, Apple, Facebook, Google (Alphabet), Nextflix and Microsoft must pay tax in Australia and we need to move to a cashflow taxing system.
“The country that owns 5G will own many of these innovations and set the standards for the rest of the world,” according to the report.
It added in no uncertain terms: “That country is currently not likely to be the United States.”
The US can’t win because 5G needs low-band spectrum, which allows signals to travel farther than high-band spectrum. The further the signal can travel, the less infrastructure has to be deployed. In the US that low-band spectrum has been reserved not for commercial purposes but for the military.
China is set to win the 5G game via Huawei.
But as of 2019 Huawei is not totally independent of the US and still relies on key components from the US. So, when President Trump banned US companies from supplying Huawei, he was set to bring Huawei to its knees.
Then suddenly at the G20, President Trump reversed the ban. The reason has yet to be discovered but was clearly related to his discussions with China’s President Xi Jinping.
Many in the US believed that a once in a lifetime chance to break China’s hold on telecommunications was lost.
Given the stakes, China almost certainly would have invaded Taiwan, which also makes the essential parts.
Stability in our region would have been greatly endangered. Soon after Trump went to North Korea. But in essence he blinked.
But in the process both China and the US learned that defence — and the internet and telecommunications are part of defence — the future is about developing local supply chains that are not dependent global supply chains. The world changed.