From Sanctions to Success: How China's Tech Industry Won

since 2016 the United States has passed thousands of sanctions against China US government officials have targeted over 70 of China's most advanced tech companies blocked entire areas like the autonomous region of shinjang from exporting Goods to the US and blocked hundreds of Chinese government officials from traveling to or even interacting with us companies all of these measures were passed with one simple goal in mind stop the rise of China us sanctions against China should have crippled the Chinese economy it should have stopped China's military from expanding it should have stopped China's ability to advance technologically

if everything went according to plan the United States should have easily had an enormous technological advantage over China but remarkably none of this came to pass for example one of America's stated goals with these sanctions was to stop China's ability to develop artificial intelligence the US government believed that if China was able to develop AI it could give the Chinese military an unfair advantage in future warfare but if you look at this graph it ranks the top companies in the world who have developed the most generative AI patents and Chinese companies dominate 12 of the

top 20 positions there is only one American company ranked in the top five and that's IBM which owns 601 patents respectively but Chinese companies represent the other four positions in the top five and together these companies combine for over 5400 AI patents alone whether you like it or not China and the US are both technology Powerhouse houses and despite us politicians best efforts to stop China's rise the Chinese have found a way to not only survive but Thrive China's phenomenal turnaround was highlighted in a recent Wall Street Journal article entitled the US wanted to knock

down Huawei it's only getting stronger and inside this article it reveals an incredible three-step strategy that China used to not only survive the harshest of America's sanctions but completely Revitalize its tech industry and set the country up for future success let's break down each these three strategies in today's video and reveal the real reason why American sanctions on China failed there is no greater case study of China's three-point strategy than studying the rise fall and dramatic comeback of Huawei China's most prolific tech company huawei's story is incredible and illustrates the hard work and determination of

the Chinese people to overcome any obstacle Huawei was founded by a Chinese entrepreneur Ren Jang Fe who was a former Chinese Army soldier who started importing foreign Telecom equipment into China Ren who was an engineer by training started making his own equipment and launched Huawei in 1987 from his studio apartment in Shenzhen over the next three decades Huawei would become one of the world's most important Telecom manufacturers by 2010 80% of the world's top 50 telecom companies worked with Huawei with Huawei selling its products to over 170 countries around the globe it seemed like nothing

could stop Huawei but the US government decided to give it that their best shot on December 1st 2018 mang Wang Joo the daughter of the Huawei founder was arrested by the US government while transferring planes at the Vancouver International Airport in Canada she was charged with violating us sanctions by selling equipment to Iran and was held under house arrest for 3 years in Canada during this time the US government launched a full force attack on Huawei and overnight the US government passed sanctions forbidding any us company to work with Huawei and the US government even

convinced most of Europe to follow America's lead and stop working with Huawei to be honest the US sanctions were incredibly effective Huawei was forced to sell its main smartphone brand because it couldn't access advanced microchips by 2021 revenues declined by more than 30% by 2022 net profits collapsed by 70% Ren Jang Fay the Huawei founder who grew up admiring the United States now realized his company was fighting for its life he issued a memo to Huawei employees state in the past we chased the ideal of globalization determined to serve mankind what are our goals now

it's to survive we will make money wherever we can this statement marked a turning point for Huawei and here was the first strategy on how China is surviving us sanctions instead of exporting around the world China has shifted to domestic consumption once again Huawei is an excellent case study to examine after the US government sanctioned the company and destroyed its Revenue Huawei began developing entire new Industries it helped build the world's most advanced shipping port in tenin it started using its 5G Network to advance the coal mining industry in China and even expanded to the

booming EV industry something even Apple has not done yet and as this graph illustrates within 5 years Huawei was able to shift its Revenue sources dramatically today nearly 70% of huawei's revenues come directly from mainland China as the company has expanded its reach into a multitude of new Industries and here is where the second strategy for China comes into play because Huawei used these American sanctions as fuel and portrayed itself as a national champion that prioritizes serving the needs of China as you can imagine this branding would go on to become very popular within China

helping Huawei expand and become even more popular amongst Chinese Nationals after 3 years of house arrest the US government eventually would go on to drop all charges against mongan Joo overnight the Founder's daughter was sent on a plane back to China and when she emerged on the Chinese runway in September 2021 she expressed her gratitude and said something that immediately solidified huawei's deep connection to the Chinese people and Country over the last three years I've come to understand this better an individual's fate a corporation's fate and the country's fate are all intertwined our motherland is

our strongest backing M was seen as a national hero in China someone who stood up against the US government for 3 years eventually winning her Freedom after M's return to China Huawei continued its impressive turnaround Huawei sales last year were over $100 billion twice that of American Tech firm Oracle Huawei is just half the size of Samsung Korea's leading tech company but incredibly Huawei now outspends it on research and development Huawei once again started producing Advanced smartphones and after trailing Apple sales by double digits in early 2020 the company's smartphone sales have made a resounding

comeback as us companies like Microsoft are reducing their presence in China once once again because of these sanctions Huawei is now hiring all the former Microsoft Engineers to join its expanding Workforce instead finally a new report from The Wall Street Journal dropped this week revealing Huawei is now set to release a new AI chip that will challenge nvidia's most powerful AI microchip Chinese companies like B Dan Buu and China mobile are already in discussions to buy the chip and what we are witnessing here is Chinese companies coming closer to support each other and find ways

to collaborate and over overcome these us sanctions in a public speech last year Ren Jang the huawe founder recalled that one of his Executives stated America doesn't understand that with this blow they are turning the biggest supporter of the US into his largest detractor it's a powerful quote and shows what a missed opportunity the United States made with China the two Nations have been trading partners for over 50 years and the relationship has produced incredible results for both Nations but the old adage of what doesn't kill you makes you stronger seems to apply perfectly in

this situation for both Huawei and China who have overcome seemingly every challenge the US government has thrown their way but now it's time to reveal China's third and final strategy to overcome us sanctions and that is government support to any industry or company deemed crucial to the Future development of China this case study of Huawei is once again a prime example over the years the Chinese government has handed out subsidies tax credits and government contracts to Rally support behind Huawei quite simply because the future of China's development depends on Chinese companies not just surviving but

pushing the limits of innovation another powerful case study to examine is the incredible rise of the Chinese EV industry for most of this Century foreign brands have dominated China's car market every year they sold millions of cars and earned billions of dollars in profits Chinese consumers love Buick Volkswagen BMW Mercedes and Toyota and were happy to pay cash for The Prestige of owning a brand that wasn't Chinese one General Motors executive was quoted as saying China is our forever profit machine we can Bank on an easy2 billion dividend every year but now that golden error

is officially over sales and profits for foreign auto brands are Vanishing while Auto Executives in the US Germany and Japan are stunned by the speed and intensity of these changes but what happened in the Auto industry was a calculated move from the Chinese government who at the turn of the century set out to become the top electric vehicle producer in the entire world and without question the Chinese government has helped achieve this goal just last month for the first time in history more than half of the passenger vehicles sold in China were new energy Vehicles

reaching 879 th000 units a year-on-year increase of 37% this marks the first time new energy vehicles have surpassed fuel vehicles in monthly sales in China and shows how mainstream EV vehicles have become and that fuel cars are now the minority in China once again the Chinese Eevee industry was fueled directly by the Chinese government who gave out subsidies and tax credits to both Chinese and foreign companies I mean why else would Elon Musk build his gigafactory in China but before anyone claims this strategy is unfair it's important to note that this is simply a best

practice used by Nations around the world including the United States when Joe Biden passed the chips act in August 2022 the US government pledged over $50 billion to the microchip industry in America helping companies like Intel Micron and Texas Instruments the chips act even helped persuade taiwan's tsmc the largest and most important microchip producer in the world to invest billions of dollars in building a new Factory in Arizona but moving forward we will see increased support from both the Chinese and US governments as sanctions trade Wars and uncertainty Mark the future of us China relations

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you for spending time with me here today on YouTube check the video description for all those links and information and drop me a comment down below and let me know what you think about these three strategies from China on how they survive us sanctions as always thank you for your incredible support and I look forward to seeing you all in our next video soon