Unmask Inscrutable Chinese Intentions

China has an uncanny ability to describe what the United States wants to hear while pursuing the future Beijing is determined to create.

     At a 2014 Asia-Pacific Economic Cooperation summit, Chinese President Xi Jinping told President Obama the Pacific Ocean was "broad enough to accommodate the development of both China and the United States." A year later, China declared it had no intention of militarizing its artificial islands in the South China Sea. Today, China has radar installations, reinforced concrete bunkers, and missiles on three of its artificial islands and claims "indisputable sovereignty" in their adjacent waters.

     In 2017, the Taiwan-based Chinese company, Foxconn, arrived in Wisconsin offering to create 13,000 new jobs in a State, where then Republican Gov. Scott Walker had failed to deliver on a campaign promise to create 250,000. In return for the increase in employment and plant investment that Foxconn agreed to bring to Wisconsin, the State offered the company generous tax credits said to be anywhere from $3 billion to $4.5 billion.

     During the past two years, Foxconni 's Technology Group changed its original plan to manufacture TV liquid crystal display panel screens in Wisconsin. While holding to its contractual obligation to employ 13,000, Foxconn now claims three-quarters of the jobs in Wisconsin's 6G "technology hub" will be in research, development, and design, rather than in blue collar manufacturing jobs.

     In Manhattan, Mayor Bill de Blasio said any attempt to change the terms of the agreement that brought Amazon's second headquarters to the city would nullify the contract. How can Foxconn alter plans for its operation in Wisconsin without any consequences?

     Whether there are 9,750 employees with skills to handle the 6G tasks Foxconn now expects to perform in Wisconsin is doubtful. In 2018, Foxconn did not qualify to receive any tax incentives, because the company only created 178 of the 260 positions it agreed to fulfill in that period. Were these 178 positions filled by Wisconsinites?  Since an audit in December, 2018 found the Wisconsin Economic Development Corporation has a policy of awarding tax credits for employees who do not work in Wisconsin, it seems possible Foxconn even could receive tax credits for 6G jobs performed by Foxconn employees in China.

     I do not pretend to know how a 6G (sixth generation) network works, but I doubt Gov. Tony Evers and the GOP legislature that approved the Foxconn contract do either.  I do know 6G networks are designed to facilitate the IoT
(Internet of Things). If home appliances and office electronics with display panels instantly transmit everything they see, an advanced ultra-high frequency 6G network is needed to instantly transmit an enormous amount of data. And memory chips are essential to this technology.

     By locating in the United States, Foxconn can purchase memory chips from U.S. companies, such as Qualcomm, and avoid the export ban that nearly put ZTE out of business in China, when Congress initially prohibited the exports it needed. (See the earlier post, "China's Domestic Economic Belt.")

     Chinese scientists suggest how lovely it would be to use 6G technology to share a holiday dinner with friends and relatives thousands of miles away. Benign 6G applications in driverless cars, aviation, and medicine do seem beneficial. But you only need to imagine paying China for devices that allow Beijing to look into every home and business in the United States to recognize problems and the need for government regulation.

     U.S. officials already indicate they consider the practices and equipment of China's telecom firms a national security threat. Huawei, which builds networks in 170 countries, is charged in the U.S. with flaunting sanctions forbidding exports of memory chips to Iran, stealing intellectual property, and improper banking disclosures. After Canada arrested Huawei's chief financial officer, Meng Wanzhou, Washington asked for her extradition to the United States. To date, no evidence reveals Huawei's smartphones or networks have been used for spying, but the fear that they, or their 6G successors, could be used for that purpose persists. As long as Huawei offers good service at a lower price than competitors, U.S., European, and other companies will not shy away from buying their products. In China, President Xi is determined to eliminate  dependence on, and influence related to, chips supplied by U.S. companies.