CRI听力:Industry insiders upset at Trump move to restrict market access

US tech industry insiders are expressing their disappointment on the recent moves by the Trump administration to restrain market access for Chinese tech companies in the country. Meanwhile, multilateral organizations such as the International Monetary Fund are warning that the protectionist trend demonstrated by the US side is likely to hurt not only the two sides, but also the world as a whole.

Jeremy Allaire is the CEO of Circle, an internet tech company based in Boston, Massachusetts. He said he is disappointed by the recent restrictions put on Chinese tech companies by the Trump administration and both governments should try to give more access to each other's business. 

"I am disappointed in the kind of sanction activities. I think it's a real loss for the world economy. I am much more interested in seeing both American and Chinese companies being able to compete freely. Of course it will be great to see some of the restrictions American companies have in China lowered. But at the same time, I think it's important for Chinese companies that are innovating to be able to access the US market." 

The US Federal Communications Commission recently decided to move forward with a policy to ban federally subsidized telecommunications companies from using suppliers the Commission claimed to be posing a threat to US national security. The policy is likely to hurt Chinese tech companies such as Huawei and ZTE who have already established years of business practices with their American counterparts. 

The U.S. Department of Commerce has also imposed a denial of export privileges against ZTE for alleged violations of the Export Administration Regulations.

In reality, these restrictions on Chinese companies are likely to hit their US partners hard, too. According to statistics by market research company Counterpoint headquartered in Hong Kong, ZTE sells around 45 million smartphones per year globally, and almost half of them have Qualcomm chips. The company then estimates with an average of 25 dollars per chip the ban on ZTE means nearly half a billion dollar loss for Qualcomm. 

Multinational organizations are warning about the spillover of US-China tensions, too. At this year's IMF and World Bank spring meetings, IMF chief Christine Lagarde said tensions on trade are likely to hurt investors' confidence in the long run. 

"What is more important is something that is more difficult to measure in the short term. And that has to do with the erosion of confidence. When investors do not know under what terms they will be trading, when they don't know how to organize their supply chain, they are reluctant on investing. Growth is currently being driven by more investment than we had seen in previous years and more trade, so why damage those two engines that are effectively working for growth?"

Lagarde also cautioned that in a globalized world perhaps no one can simply just walk away from frictions between the US and China, the world's two largest economies.

"And it would not be something that would affect two countries, because the world is so interconnected. The supply chains are involving so many different countries, regional, intraregional, interregional, that it would affect the global economy. So as Churchill used to say: It is better to jaw jaw than to war war."

Moving forward, instead of launching constant aggressive actions, Jeremy Allaire, the CEO of Circle, said he hopes both sides can adjust policies to help business. 

"I think at the end of the day it's deal making. It's coming up with some economic partnership agreement that includes changes in both countries on the rules and regulations for foreign company participation."