Contesting globalization in the rise of nationalism the case of us china trade conflict

VIETNAM NATIONAL UNIVERSITY, HANOI
UNIVERSITY OF LANGUAGES AND INTERNATIONAL STUDIES
FACULTY OF ENGLISH LANGUAGE TEACHER EDUCATION
FACULTY OF LINGUISTICS & CULTURES OF ENGLISH SPEAKING COUNTRIES

TRẦN CƠNG HỒN

GRADUATION PAPER
CONTESTING GLOBALIZATION IN THE RISE OF
NATIONALISM:
THE CASE OF US-CHINA TRADE CONFLICT
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE DEGREE OF BACHELOR OF ARTS

Supervisor: Đặng Ngọc Sinh, PhD.

Course of Study: QH.2016
Student ID: 16040160

Ha Noi, 2020.


ĐẠI HỌC QUỐC GIA HÀ NỘI
TRƯỜNG ĐẠI HỌC NGOẠI NGỮ
KHOA NGƠN NGỮ VÀ VĂN HỐ CÁC NƯỚC NĨI TIẾNG ANH
KHOA SƯ PHẠM TIẾNG ANH

TRẦN CƠNG HỒN

KHỐ LUẬN TỐT NGHIỆP
TỒN CẦU HOÁ TRONG BỐI CẢNH

CHỦ NGHĨA DÂN TỘC ĐANG LÊN:
CÂU CHUYỆN CHIẾN TRANH THƯƠNG MẠI
MỸ - TRUNG QUỐC
Giảng viên hướng dẫn: TS. Đặng Ngọc Sinh
Khoá học: QH.2016.F1
Mã sinh viên: 16040160

Hà Nội - 2020


ACCEPTANCE PAGE
I hereby state that I: Trần Cơng Hồn, QH2016.F1.E32, being a candidate for
the degree of Bachelor of Arts, accept the requirements of the College relating to
the retention and use of Bachelor’s Graduation Paper deposited in the library.
In terms of these conditions, I agree that the origin of my paper deposited in the
library should be accessible for the purpose of study and research, in accordance
with the normal conditions established by the librarian for the care, loan or
reproduction of the paper.
Signature

Date


SUPERVISOR’S APPROVAL

ii


DEDICATION

For my Father, who always believes that education can change this world...

iii


ACKNOWLEDGEMENTS

This thesis would have never existed without the amazing lectures in the
Division of Country Studies, giving me the best support and encouragements for
what I love and what I have trying to do.
To my supervisor, Mr. Đặng Ngọc Sinh, PhD for his priceless ideas and nonstop guidance
To the Head of Division, Ms. Phùng Hà Thanh, PhD for her inspiration and
countless cares for me and all her students
To my dearest friends in class 16E32 for your kindness and trust
And to my family, where I am never abandoned


ABSTRACT

This case study examines globalization in the rise of nationalism via the
scope of the events in the US-China trade war that started in 2017, yet the
prediction of possible conflicts between those two nations might root from much
earlier, due to a long-lasting history of economic cooperation and trade
engagement between two countries. The trade war has inflamed different
impacts on the society and the world economy, even political or economic
development pathways of any nations that are related may suffer as their
participations in the world economic platform. However, one of the public’s
leading questions is how two superpowers have gone globalized or nationalist,
to rebound upon each stage as the trade war’s escalation.
This thesis includes perceptions, understandings and explanations from

the chosen events to be analyzed, namely the tariffs and the following changes
of the global supply chain.
The study then concludes that globalization is changing, not ending. The
previous approaches to globalization and nationalism need to be reviewed in
several ways. The trade war itself has not ended, so the research around it still
remains huge to be done to broaden understandings of international relations.
This experience to globalization and nationalism can partly contribute to the
debate of the dominating movement is either globalization or nationalism.


TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION ....................................................................... 1
Background of the Study ................................................................................ 1
Research Problems and Questions .................................................................. 3
Methodology .................................................................................................. 3
Potential Significance ..................................................................................... 4
Overview of the Chapters ............................................................................... 5
CHAPTER 2: GLOBALIZATION, NATIONALISM AND GLOBALIZATION
IN NATIONALISM ........................................................................................... 6
What is globalization? .................................................................................... 6
What is nationalism? ...................................................................................... 8
O’Sullivan’s theory: The end of globalization .............................................. 10
CHAPTER 3: THE TRADE WAR IN A GLOBALIZED WORLD ................. 12
China in the Force of globalization ............................................................... 13
Huawei and “Made in China 2025” .......................................................... 13
Apple, Costco and Tesla in China: The globalized policies of China ........ 20
“The Tariff Man” and America First ............................................................ 26
Chapter 3 – Summary ................................................................................... 33
CHAPTER 4: GLOBALIZATION IS CHANGING......................................... 34
US-Japan Trade Conflict Throw-back .......................................................... 35

New Coronavirus pandemic (2020) and the future of globalization .............. 40
Chapter 4 – Review ...................................................................................... 42
CHAPTER 5: CONCLUSION ......................................................................... 44
REFERENCE ................................................................................................. 46

i


LIST OF FIGURES
Figure 1 Costco opens its first store in Shanghai with fully crowded shoppers
(He & Wang, 2019). ......................................................................................... 22
Figure 2 Tesla's Giga Shanghai assembly line (Lambert, 2020)........................ 24
Figure 3 Tesla Chief Executive Elon Musk in the opening of Giga Shanghai on
Jan. 7th, 2020 (Whalen, 2020) .......................................................................... 25
Figure 4 Peak Pegasus loaded with 70.000 tons of soybean on board (Reuters,
2018) ................................................................................................................ 28
Figure 5 Annual US Trade Deficit with China (US Census Bureau)................. 30
Figure 6 Chinese people trying to buy pork in a local supermarket (The Straits
Times, 2020) .................................................................................................... 31
Figure 7 US Agricultural Exports to China (USDA, 2018), as cited in Jones
(2019)............................................................................................................... 32
Figure 8 Japan's Economic Growth Rates (1956-2018) .................................... 36
Figure 9 Japan's market shares of semiconductor ............................................. 37
Figure 10 Currency movements between USD and RMB (Lee Y. N., 2020) ... 37
Figure 11 USA and China GDP - PPP net (current international USD) (The
World Bank, 2020) ........................................................................................... 39
Figure 12 Wuhan lightshow on the reopening day (Zhong & Wang, 2020) ...... 40
Figure 13 Total active cases with Coronavirus in the US (from Worldometer) 41

ii

CHAPTER 1: INTRODUCTION
This chapter would like to provide fundamental materials about how the USChina trade war occurred, to locate the basis on globalization in the rise of nationalism
and to introduce the research problems and questions, mode of inquiry and my
theoretical perspectives, along with providing an overview of the research.
Background of the Study
This research demonstrates my analysis of globalization presenting in the trade
war in the rise of nationalism. It is burdensome to conclude that globalization has
disappeared in this time, because countries are currently cooperating, via both bilateral
trading and multilateral trade agreements, such as North America Free Trade
Agreement (NAFTA) and the recent Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP). Apart from that, nationalism is witnessed in the
case whenever nations have to face threats in their development, when nations
prioritize their identities as independent nation-states to protect their countries from
unwanted factors brought by globalization, mostly unstoppable trade deficit.
Accordingly, the trade conflicts between two superpowers have raised immeasurable
awareness of the world’s modern politics and orders. In addition, the US-China trade
war could be considered the key event that could change the world order. In that case,
there is no absolutely secured solution to the problem when there is no absolute power,
or an observable bipolar context, when the globe seems to move into the time of
multilateralism (Friedberg, 2005). To prove this, Stiglitz (2017) wrote:
“We have created a system of global governance without global government. These institutions can
help the world maintain an open yet regulated trading and financial system, even if the US withdraws
into its shell, or decides to take actions which violate its obligations.” (p.444)

Apparently, maintaining national interests in the conflicts is the first concern of
any nations. However, the process of globalization can be stated as the spread of
global sourcing and sub-contracting (Arndt, 1997), bringing interdependence among
nations when they cooperate, or when the multi-national companies (MNCs) do

international investments. The World Trade Organization (WTO) has been formed to
be a patron saint of international free trade, and has pursued common rules for nations

1


to initiate separated regulations (Vogel & Kagan, 2002); however, the promising
future of the WTO can only be functioned under the theory of globalizationism,
according to which the major of nations agree to prioritize global cooperation and
apply for a uniform mechanism of development, demanding for the undeniable roles of
international organization and their effectiveness in operation.
However, the previous order has not been long-lasting, and the world seemed
to have changed enormously. The Presidential Election of the US in 2016 ended with
Donald J. Trump elected as the 45th President of the US, accompanied by the gradual
withdrawal of the USA from international cooperation commitments launched by the
predecessor government of President Barack Obama. With the notorious slogan “Make
America Great Again”, President Trump is considered to have challenged the basis of
globalization by putting tariffs on China’s products exported to the US. In reverse,
Chinese government, led by President Xi Jinping, also imposed tariffs on US products
and limited the investment of US companies in China mainland. Besides, Trump also
put strong tariffs on American allies such as European Union, Canada and Australia,
and threatened to exit from the WTO, explaining that globalization and free trade did
harm the US citizens and economy.
It is clear that President Trump is pursuing nationalism and he is even
criticizing globalization for the recession of US manufacturing industry, but the fact
that the trade war can truly doom globalization is still inconclusive (Rudd, 2015).
Trump’s pursuit of nationalism and his criticism of globalization exemplified the
viewpoint that recognizes nationalism and globalization as two reversed ways of
development. In a different wording, nationalism results in anti-globalization, and
globalization denounces nationalism. With regard to this question, O'Sullivan (2019)

proposed that globalization has come to its final, which means the world will move
into a different stage of development, with multipolarity as the dominant ideology,
represented by three great development polars: America, European Union and Chinacentric Asia. Accordingly, nationalism, then, will focus on the participation of nations
in distinct groups, but there is no available free choices, so the nations are separated
geo-politically.

2


O'Sullivan (2019) stressed the extinction of globalization as the rise of that new
type of nationalism in his new publication, The Levelling: What's next after
Globalization. O’Sullivan’s ideas did light up my curiosity to investigate globalization
presented in the US-China trade war. I began to find some more ideas from global
think tanks, then read about how globalization is tailored, threatened and handled to
bargain in the world’s politics and economy.
Research Problems and Questions
I would like to contest the presence of globalization in this rise of nationalism
with the theories of O’Sullivan (2019). Regarding the scope of analysis, it is important
to note that this research cannot represent worldwide process of globalization. I will
analyze the case of the US-China trade war to specifically answer the following
questions:
-

What are the factors and events during the US-China trade conflict proving
whether globalization is going to end or keeps going on?

-

How is globalization changing, in response to the rise of nationalism, in the
case of US-China trade conflict?

Methodology
A qualitative research approach can accommodate the purposes of this thesis. It
allows detailed description of circumstances in which globalization is contested by
nationalist policymakers and practices. The research also facilitates the persistent
mission of understanding the impact of the trade war in representing and changing
globalization in this era.
This qualitative research attempts to analyze the development of globalization
during the trade conflicts between the US and China. The potential of global
cooperation, as a result of globalization, is evaluated through observing the economic
footsteps of leaders of two nations.
The contesting of globalization in times of nationalism can be presented in this
research, by reflecting on the ideas of the final end of globalization by O’Sullivan
(2019). In his book and some recent interviews, there are different understandings

3


about globalization paradigm in the context of raising nationalism. Those opinions are
either to contest the presence of globalization, or to prove the continuance of discourse
of globalization.
To the end, the research is not to express why and how the trade war and the
trade agreements have been organized and negotiated, but to draw attention to the
process of drafting and building national discourses over globalization and nationalism,
by the counterarguments and explanations, in order to explain if globalization is
severely threatened in the trade war. Moreover, the distribution of power and the
realization of nationalism in both nations, can also be a promising issue to be resolved.
This research would not fall in simple tweets and quotes analysis, but to analyze
the process of creating discourse of globalization to optimize national benefits.
The framework for this thesis is based on a case study, as it is an important

political and economic event that can strongly affect both the participants and even
more and more nations having trade relations with two economic superpowers.
Moreover, this study used content analysis to explore figures from sources that are
considered suitable for an undergraduate thesis. The study calls on literature review
and data collected from a variety of carefully examined sources.
Potential Significance
This thesis aims at contributing to the discussion of globalization in the rise of
nationalism, or how globalization is processing that can affect the world economy and
development. Moreover, it may possess some potential significance for the
understanding of globalization, one of which could be globalization contain with
“nationalist acts”, representing even in the rise of nationalism, but in a paralel
movement. In this regard, this thesis helps presenting a new theoretical pathway for
dealing with globalization effects, in terms of typical segregation of globalization in
the rise of nationalism. Besides, analyzing globalization in this case study is also to
predict the trend of the world economy from inside the trade war, or how it is
proceeding.
This study also tries to contribute to an understanding of globalization in a
specific case: the trade war between the US and China, the event that can lead to

4


massive changes in the world economy, policies, or even attitude towards
globalization.
Overview of the Chapters
After the Introduction in Chapter 1, Chapter 2 will shorly introduce the
groundwork and method of understanding to globalization and nationalism. This is the
basic understandings I used in this thesis.
In Chapter 3, I analyzed the China and US approaches to the Trade War,
showing their pathways in globalization in the rise of nationalism.

In the next chapter, Chapter 4, the event of the US-Japan trade conflicts will be
compared with the US-China trade war and will explain the situation that the world
basic norms are overthrown.
The last chapter concludes my understandings throughout the thesis and
discusses the limitations of the study.

5


CHAPTER 2: GLOBALIZATION, NATIONALISM AND GLOBALIZATION IN
NATIONALISM

Globalization is generally interpreted as a process, while nationalism can be
embedded as a discourse (Kahler, 2009). Moreover, Liu & Woo (2018) addressed
globalization and nationalism as two reverse but parallel processes and mentioned the
theory of equilibrium of either more global or more national reactions of states
towards diplomatic and political issues. The difference between globalization and
nationalism can be regarded from their word formation, with the distinction in their
suffixes. Much as it can be noticed, globalization is not the antonym of nationalism
that can be the reason to understand the key features of these two terms. This thesis
prioritizes the discrepancy between them as the entrance to explain and interpret the
practice of two nations in the trade war.
However, it is a common understanding that globalization is the way the world
blends in, and nationalism is when the world separates. This could not offer correct
insights of how people may think and do, as it would be the huge misleading into the
basic morphological explanation. I do not assume, at the beginning stage, globalization
and nationalism in their confrontation. The two terms should not be built and appear as
a current stereotype about a non-existing definition. Nationalism should be the setting
or the primary background for globalization, because it forms the basis of nationhood
and encourage the focus on inner-state issues. This is the reason why the title of this

thesis implies globalization in the rise of nationalism.
This chapter lays the basic groundwork for the thesis by reflecting the
description of globalization and nationalism, together with the explanation of
O’Sullivan (2019) about the end of globalization. The understandings below are vital
to implement what this thesis is trying to focus on, as this research is not able to draw
attention to all theories and explanations. The main point currently is to demonstrate
globalization as something not totally refusing nationalism.
What is globalization?
Globalization always includes the context that people use to define it. There are
more than 76 million answers after a quick Google Search, which signals a huge

6


number of ideas and interpretations of globalization. However, globalization can be
understood broadly as something covering mostly economic relations, then technology,
political models and socio-cultural exchange. This research will put the scope on the
effects of globalization in economy.
Globalization evokes, in some ways, a process that happens in the world
economy, by “aiming and controlling” markets. It helps with the supply of product,
then ultimately with developing markets, from regional to global ones (Arndt, 1997),
because cooperation prompts nations to decide to be involved or not. That may lead to
several changes in the willing-to-join nations, if they want to be included. It appears
that being included is a globalized action, because policymakers need to adjust their
nations’ development pathways to fit in a new lawsuit. In reverse, a refusal can be
considered “not globalized”, because that nation chooses to stand out of a group of
nations, whose the first and foremost reason is to protect domestic manufactory.
Donald Trump’s “walk-out” of Trans-Pacific Partnerships (Taylor, 2018), to protect
American manufacturers and to promote US-made products can be a good example of
prioritizing national benefits of the US government.

One of the biggest and most debatable questions, even before US-China trade
war, tends to be whether globalization is apparently unstoppable or if it has its own ups
and downs (Pryke, 2012). Held & McGrew (2003) introduced a notable theory of a
debate between “globalists” and “skeptics”, having tried to describe a backlash of
globalization in the eyes of “skeptics”. Apparently, the process of globalization can be
affected differently under the prism of viewers, and it is equally important to
investigate globalization with economic (or economic globalization), political and
socio-cultural viewpoints (Held & McGrew, 2003). Meanwhile, globalists argue that
globalization is the central force to shape the world order, in which MNCs help change
1

the world labor division, exemplified by BRICS countries as the models for fully and
positively facilitated by globalization. Moreover, globalists may support the idea that
globalization can challenge inner-state economic options, because developing
countries may be the passive factor in approaching to globalization, by depending on

1

New developing countries include Brazil, Russia, Indian, China and South Africa.

7


the manufacturing process and technology, so the governments are supposed to be
more flexible in navigating their nations to face globalized impacts.
Alternatively, looking at how globalization can affect the world order and the
way people live is much easier than answering the question whether there are any
currents that make the nations gradually refuse to be more globalized. It brings
industrialization, liberalism and mercantilism to developing countries explained by the
example of China, an industrialized nation with huge economic relations to most of the

countries in this world. China has enjoyed great trade surplus with the USA and a lot
of its other partners, but it remains closed to several international companies to protect
national sovereignty.
During the debate of “globalized” and “not globalized”, there is an idea proving
that globalization in a narrow understanding is westernization or more civilization, and
globalization will continue in a way with no more westernization (Jacques, 2009).
Consequently, westernization cannot be understood as globalization anymore, so
globalization should make a comeback to the root of it. Globalization needs to be more
adaptive to the new world order, and it should not be the process of Western-centric
and industrialized westernization (Jacques, 2011). The theory of Jacques (2009 &
2011) is an important keynote for crafting the ideas for the argument of this thesis.
What is nationalism?
Writings about nationalism can be located in various sources, created by
academic conversations by many authors. However, the word nationalism can be
understood differently in each nation. For example, in Vietnam, nationalism can be
understood as an ideology attached with patriotism, national independence, and the
nationhood and the unity of people (Vu, 1996). On the other hand, Pryke (2012)
mentioned nationalism by refering to economic and historic changes, mostly as
protectionist economic acts, starting in the early 19th century, as a reverse of
globalization, and he even named it economic nationalism. In this thesis, nationalism
is more likely to be understood as Pryke’s (2012) economic nationalism.
The essential goodness of free trade has been praised as globalizing the world
economy, yet nationalism is pursuing militarism, imperialism and economic

8


nationalism in the late 19th, along with stifling free trade, curtailed democracy and
precipitated war (Wolf, 2004). Along with that, the rise of nationalism can be noticed
as US government adapted nationalist and protectionist economic changes, as

economic nationalism has become more praised during the Great Economic Recession
in 2009 (The Economist, 2009). For example, the victory of Donald Trump in the
presidential election in 2016 marked the victory of nationalism in the United States
(Frieden, 2018) reasoned by protecting American firms and workers that the trade war
burst.
Wolf (2004) also pointed out that nationalism can be interpreted as a part of
capitalism, in which national identity is more appreciated than globalization, because
nationalism in the aforementioned understandings, is not only about domestic
manufactory and politics, but also about the national, or civilian identity that is
presented globally to tribute to motherlands and the pre-existing values (Pryke, 2012).
For example, back in Meiji’s Restoration in Japan (1868), the reason for developing
countries through industrialization, along with developing Japan, is to compete and to
come abreast with foreign competitors (mostly Western countries) and to create the
national belief of a developed and powerful country. Consequently, nationalism can be
the motivation for globalization through westernization and industrialization. In this
case, economic nationalism cannot be separated from globalization, but they are
manipulated paralelly by the governments in order to pursue national goals. In another
wording, nationalism can be achieved by adapting globalizing strategies for economic
development.
Notwithstanding, nationalism seems to be specifically favorable in China.
Moreover, it is even leveled as a basic hypothesis of the society, Chinese nationalism,
calling for international alerts of respecting the national dignity of China (Babones,
2019). The process of shaping Chinese nationalism in China essential to make people
think more carefully about the difference between itself and traditional economic
nationalism, in order to take a new scope on the arguments about the trade conflict.
Babones (2019) mentioned the historic march of Chinese students in Tiananmen
Square in 1919 against imperialist nations (especially Japan and Chinese pro-Japanese
politicians), and they, Western-educated students, believed that nation-states were the
way of the future.

9


O’Sullivan’s theory: The end of globalization
Recently, O’Sullivan (2019) has declared his new theories about the death of
globalization in his book The Levelling: What’s next after Globalization, instituting a
new aspect of post-globalization, accordingly. In short, he mentioned the fall of
globalization is the direct consequence from the raise of nationalism, and the world
may move into the stage of multipolarity, shaping the new world order by three areas
of development: America, European Union and centric-China. The nations tend to
focus less on international issues and pay more attention to inner-state and innerregion problems.
O’Sullivan (2019) focused on the market, especially financial market, to make
his prediction about the world’s movement towards a non-Globalizational world. It is
important for a nation to have good and fair finance, but the demand for developing
infrastructure or welfare (or public goods) is also essential. Fortunately, globalization
makes pricing less stressful for any nations, governments or firms to solve the problem
of price (Bown & McCulloch, 2009), by selling bonds or taking loans from
international sources. However, this is the factor that can mark an end for globalization,
because a more financialized market can be based on the imbalance of money flow.
We may witness no visible issues when the economic growth is stable, but can be a
huge constrain when the economy is slowing down (O'Sullivan, 2019).
The second reason for the past of globalization is the unequal distribution of
global economy, from income to manufactory and supply chains. It is witnessed that
the world economy or even human beings always have problems with their operating
process, by making income gaps and development gaps. More and more factories are
built in China and several better-developing countries, rather than fairly distributed to
any nations showing their warm welcome towards investors. Apparently, the dominant
multinationals (MNCs) prioritize serving their investing menus by several countries
that are more profitable by their geographical benefits. For example, textile factories
are more likely to be located in nations around China and India, if they have to be

outside the two powerhouses of world textile, because those factories can take
advantage of the materials from their huge neighbors.

10


O’Sullivan’s (2019) theory is worth examining in this research, because his
analysis covers the development process of globalization and his prediction about a
non-globalized world. However, I would like to address my viewpoint for the
argument that globalization cannot end yet and to compare how the world has been
doing after one year of his book publication.

11


CHAPTER 3: THE TRADE WAR IN A GLOBALIZED WORLD
US and China seem, or at least seemed, to be in a huge boat together. When the
US is a huge consumer, China, in reverse, is a nation of manufacturing. According to
the US President’s Trade Representative (2018), China is the leading exporter to the
US, equaling to $539.5 billion. US goods trade deficit to China totaled $419.2 billion.
However, China ranked 3rd only in the US largest export markets, as exports to China
accounted for no more than 7.2% in total US exports.
On the positive side of globalization, it is presented that there was a boom in
globalizing economic process between two superpowers. In fact, globalization helps
turning the US into an importer and China into an exporter, or even a superpower, by
surpassing Japan to become the 2nd largest economy in the world (Mohanan, 2011).
Furthermore, China is even predicted to outweigh the US in terms of PPP in 2020, and
India’s economy is to exceed US in 2030, due to the rise of India as a promising
manufacturer (Jonhson, 2019).
Apparently, something is wrong. When nations enter globalization, they hope

for free trade and common benefits, but in this case, there are nations taking possibly
more profits than others do, totally separated from the basic framework of
globalization. In common consideration, economic globalization can be understood as
a process that helps nations to improve their economies together by free and fair trade,
and let consumers to enjoy better priced products. Given that context, China is
supposed to become an important division of global supply chain. However, it has
become the central manufacturer of the world, after settling the goal of the nation
having the ability to produce everything and produce for the entire world. The USA, or
any other nation, now has (or has to) inactively turned into a consummative country,
while the US companies in service area access to China to make profits from Chinese
new middle class (Zarroli, 2019).
In this chapter, I am trying to analyze how concrete the world market and
supply chains are, marking the continuous collaborations among nations in the future,
as a part of globalization. Moreover, the way that two superpowers’ governments deal
with the economy is also descriptively portrayed.

12


China in the Force of globalization
The previous chapter implied the navigation of globalization that can lead to
necessary cooperation, with good-will aims for partnerships. I have also described
O’Sullivan’s (2019) idea of globalization as the basis of an old-fashioned
interconnected world. Globalization consistently evokes an everlasting debate on its
advantages and disadvantages. The trade war erupts in the meantime to extend the
question of the necessity of globalization, the rise of nationalism and the tension
between economic growth and national independence (or in fact national independence
of economy). In Trump’s presidency, that the US President condemned China for the
negative influence to the US economy, is the main phenomenon having activated the
conflicts. However, at short notice, the nationalist acts were also conducted by Chinese

government in response to President Trump’s trials2.
There are various examples and cases during the trade war, most of which have
not come to the finale. I hereby chose the noticeable incidents that relate to both
countries, to analyze how the trade war affects their economies. About China, I chose
Huawei to investigate how the Chinese government supports domestic brands and how
the US government prevents the Chinese giant. Besides, I want to look at several
famous American brands doing business in China to figure out the differences in how
domestic and foreign companies are treated in China. About the US, the “tariff attack”
starting by President Trump is mentioned to measure how American companies suffer
or benefit during the trade war. Furthermore, I want to justify the continuance of
globalization and the interdependence of two nations during the trade war.
Huawei and “Made in China 2025”
“Building a fully connected, intelligent world” is the motto of Huawei Branch
located in the USA. Founded in 1987, by a former Chinese People’s Army officer Ren
Zhengfei, rising from a small manufacturing company in Shenzhen, Guangdong
Province, Southern of China, Huawei has become a leading provider of technology
infrastructure and smart devices in more than 170 countries, with more than 180000

2

This word refers to the prevention of Trump’s government against Huawei, when there was a ban declared and
then an extension to not execute the ban.

13


employees and USD 103 billion in sales 3. The company ranks at the top of smart
device manufacturers in China mainland, and the second largest phone making firms
in the world, led by Samsung with its significant market share (Smith, 2019). It is also
the world largest supplier of telecommunication devices, the value of which is even

twice as big as the following company’s value (USD 92.55 billion of Huawei vs. USD
48 billion of Cisco Systems) (Rauhala, 2018). With the advance in 5G technology,
Huawei should have enjoyed the bright future of development. However, the sunny
days for the Chinese technology giants do not seem to last so long, as soon as the US
government implies restrictions on the business. During Trump’s Presidency, Huawei
has been pushed harder and harder to the edge of difficulties for which they may have
never prepared. As an example, ZTE, a Chinese tech giant, a top-of-the-world
telecommunication device maker and a 5G technology developer, has been banned
from cooperation with US technology companies and production of mobile devices
using American accessories, leading it to the verge of collapse. At first glance, Huawei
tends to follow the path of ZTE to their gloomy days. However, the story of Huawei
can be distancing, and the policies that Trump has used to deal with the two companies
are totally different.
Huawei, ZTE and numerous other Chinese companies have enjoyed a booming
age of development, thanks to globalization, when China came to the world by the
economic reform in 1976. The globe has witnessed the amazing rise of China.
According to the World Bank (2020), the nation’s surprising annual GDP growth,
most of the time, has doubled that of the USA since 1978.
Globalization helps China to open to the world. Becoming the nest for foreign
companies and the manufacturer of any product for the whole world is exactly what
China has done to globalize. Previously, Western countries developed themselves by
manufacturing and industrialization (Mor, 2018). Accordingly, China has followed the
pathway of being a supplier and has been doing well up to now. However, the
distinction of Chinese management is how the government deals with any MNCs in
need of nesting in the country. Chinese government requires any manufacturers, with
the desire to set up their new production line in China, to cooperate with a native firm
3

Retrieved from Huawei Technologies USA on April 1st, 2020 at />
14

and to do technology transfer4 to their local partners (Frankenfield, 2019). Basically,
companies reserve the rights to decide their business scopes, but their limited choices
are carefully legalized by the authority, from a Wholly Foreign Owned Entity (WFOE)
to a Joint Venture (JV), according to the percentage of capital held by Chinese
domestic companies and foreign partners respectively. This is no longer the way to
allow Chinese companies to work as “copy-cats”, but the way for foreign companies to
receive authorized protection from Chinese government and to truly and officially get
access to China mainland, a dream place for their planning factories and a dream
market, with more than 1.4 billion of workers and consumers, and especially an
advanced logistic system that can never be found in India or South East Asian
countries (Rapoza, 2019). However, this does not guarantee the issues about IPs5 are
totally cleared, due to various reasons such as miscommunication among partners,
unconventional management styles and cross-cultural differences (Kaufmann, 2017).
This has yet affected the desire of MNCs to China, because the possibilities of IPs
issues are thought to be forestalled by carefully revisited documents of cooperation.
Literally, they must have taken the risks, and there must be progressive and undeniable
benefits for them so that there are more and more foreign companies choosing China
as their new homes. In general, China tends to be still an acceptable nest for the
production line and, at least, a fruitful market, with more than 1.4 billion of consumers
and a continuously soaring number of middle class people of at least 400 million
(Zhou X. , 2018).
Aside from replenishing foreign companies’ entries to China, resulting from the
opening of the governmental legislatures, there settles an immense number of soaring
and maturing domestic businesses, especially in “extremely important and restricted
business areas”, also known as key areas 6 , in which foreign companies can be
participants only by cooperating with Chinese companies with proper and legal FTT.
(Frankenfield, 2019). In that development pathway, by focusing on science and
technology, an indivisible part of which is telecommunication, China quickly masters

4

Technology transfer in China often works as Forced Technology Transfer (FTT). In China, it is presented as
the method that companies have to undertake in exchange for the market access (Frankenfield, 2019).
5
Intellectual Properties
6
Key areas refer to the checklist of 10 fields to initiate China main focus in manufacturing: New information
technology, high-end numerically controlled machine tools & robots, aerospace equipment, ocean engineering
equipment & high-end vessels, high-end rails transportation equipment, energy-saving cars & new energy cars,
electrical equipment, farming machines, new materials and biomedicine & high-end medical equipment.

15


most of the technology accomplishments, and even becomes an influential
manufacturers and a vital factor of global supply chain, marked with the births of
domestic business giants. Only in technology, from a nation of outsourcing firms to
the tech leaders from the USA (Apple), Europe (Nokia, Motorola), Korea (Samsung,
LG) and Japan (Sony), China has developed a domestic technology league with strong
and famous representatives, such as Huawei, ZTE, Xiaomi and BBK Electronics. It is
considered as nationalist acts from China to protect and develop its domestic
manufacturing (Brown S. R., 1979). In comparison with India, the nation popular with
manufacturers in mass-production of low cost products, China has become the
manufacture hub for much more famous brands, ranging from high-end fashion to
modern technology. China has taken advantage of globalization to serve its nationalist
goals, “Made in China 2025”, aiming at turning China into a powerhouse of
manufacturing, especially in 10 key areas.
The greatest and most unpreventable burden of Made in China 2025 may be the
Presidency of Donald Trump, and the first target to be bombarded is Huawei, the

“eldest brother” of Chinese telecommunication manufacturers having practical sales
all over the worlds, regarding Europe and Asia. On Wednesday, May 15th, 20197, the
administration from the White House regarded Huawei as “a party of concern” via an
executive order blacklisting the Chinese brand. Four days later, Google announced to
no longer function newly released Huawei’s devices; while continuing to allow access
from formerly available products. That means Google Mobile Services 8 are not
accessible for any new Huawei’s devices, resulting in that Huawei’s stock will surely
struggle to have good sales in international market9, where Google’s service is still
dominating. Although ZTE should have been more worried than Huawei as it directly
imports most accessories from the US suppliers to manufacture phones, Huawei still
suffers tremendously. Huawei can be more self-sufficient and less dependent on the
US partners, but a huge amount of accessories for Huawei’s phones come from
America and have no substitution. Huawei’s phone-manufacturing sector has fallen in
7

The timeline was retrieved from Android Authority at />8
Google Mobile Services refers to common Google Apps such as YouTube, Google Mail (Gmail) and Google
Maps.
9
Google Mobile Services is banned in China previously, so Huawei’s devices in China’s domestic market are
not affected by any changes about cooperation between Huawei and Google.

16