ZTE sanction affects global market, experts

People gather at the ZTE booth at the Mobile World Congress, the world's largest mobile phone trade show in Barcelona, Spain, Wednesday, Feb. 26, 2014. The global wireless show that wraps up on Thursday has seen a push to get mobile devices cheap enough to reach emerging markets without sacrificing so much performance. While the affluent crave the latest iPhones or Android phones, most of the world can't afford the hundreds of dollars they cost. [Photo: AP]

Some experts say China plays an important role in global high-tech industrial chain and the ban on a Chinese tech giant from buying any U.S. technology will have an impact on the global economy.

Wang Changlin, deputy director of the Academy of Macroeconomic Research, National Development and Reform Commission, says the global hi-tech industry chain is interdependent and China plays an important role in it.

"We've made great progress in recent years in terms of the research, development and industrialization of integrated circuits and operation systems, and some innovative companies have sprung up. We have so far preliminarily established a relatively complete industrial system, which means, speaking from the perspective of manufacturing, we are quite strong and have some basis in middle- and high-end manufacturing as well. We can cultivate an independent and core industry based on our own domestic market."

Wang made the remarks when commenting on the announcement made by the U.S. Department of Commerce which banned ZTE from buying any U.S. technology for seven years.

Stats show in 2017, China produced over 1.9 billion mobile phones and more than 300 million computers accounting for 75 and 95 percent of the global outputs respectively.

Some say that large-scale US sanctions on the export of key technologies to China make it hard for other countries to increase the production of their computers, mobile phones and household appliances in the short term.

The manufacturing industry in the U.S. and other developed countries is mainly bolstered by the high-tech manufacturing industry.

Wang Changlin said if the high technology industry slumped, it would affect the related service industries and capital markets, which will exert a significant impact on both the U.S. and global economies.

"As long as we turn the pressure into motivation, adhere to independent innovation and constantly strive to upgrade our industries to middle- and high-end ones, we'll certainly make breakthroughs in our country's integrated circuits, chips and operating systems. We are fully capable, confident and have the necessary conditions to establish our own relatively advanced and complete integrated circuit industrial system."

Data of the Ministry of Industry and Information Technology shows that China's own chip industry exhibits very strong competence in its progress.

Diao Shijing, who's in charge of the electronic information division of the Ministry, says the annual compound growth rate of the industry from 2013 to 2017 reached 21 percent, five times the average global growth rate.

"Our chip industry, especially in terms of chip design, has seen a remarkable growth in recent years, gradually nearing the top level of markets. This industry, with a rapid development in scale, has been broadly applied into many fields including people's daily life, industrial engineering, artificial intelligence and intelligent automobile. Many sectors in China rely on domestic chips."

The expert also notes China is picking up speed in building advanced integrated circuit production lines, which has led to growth in supporting industries, including equipment and materials.