come mai tutti gli smartphone vengono dalla cinacome mai tutti gli smartphone vengono dalla cina Smart LifeSmart Life

If you ever bought a phone in the early 2000s, 99% of it was a Samsung, Motorola, Nokia, LG or Sony model. 20 years later, LG has stopped making phones

and Sony, Nokia and Motorola are not doing well. In their place, a whole host of companies have taken over that we didn’t know about until a few years ago. Huawei, ZTE, Xiaomi, but also OPPO and vivo. And one thing these brands have in common: they all come from China. A nation that, in the space of 50 years, has gone from being a rural country to becoming the third largest economy in the world after Europe and the United States. But how is it possible that in a relatively few years the technology market has turned in China’s favour? What happened for it to be able to assume this position of dominance in smartphones? That’s the topic I’m going to talk about today, where we’re going to look back at China’s history to find out how this happened.

How did China become a technopowerThe

Xinhai

Revolution

and the end of the emperorsTo

understand how it all started we have to jump backwards, more precisely to 1911 when the Xinhai Revolution led to the abdication of the emperor of the Qing Dynasty and the birth of the first Republic of China. But it was then the People’s Republic of China, led by Mao Zedon, that took over in 1949. The post-World War II era saw China as a highly rural country, as evidenced by the fact that Mao himself staked everything on an Agrarian Reform that expropriated private land to give it to the state. There was a weak but insufficient economic growth and so in 1958 the so-called “Great Leap Forward” was launched, a plan that aimed to convert the economic system from rural to industrial. But the result was catastrophic and led China to the greatest famine in history: estimates speak of numbers between 15 and 55 million deaths.

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The rise of Deng XiaopingIt didn’t

take long

before Mao was gradually removed from politics, in favour of a less traditional-minded Deng Xiaoping. Still remembered today as one of the founding fathers of modern China, his “Socialism with Chinese characteristics”, as he called it, aimed at the modernisation of four key sectors: agriculture, industry, technology and the military. In the meantime, in those years, the so-called Four Asian Tigers were born: South Korea, Taiwan, Hong Kong and Singapore. We will come back to Taiwan and Hong Kong in a moment, but it was in Singapore, a former British colony, that Xiaoping visited in those years and was amazed by the economic growth that this small but rich country was enjoying. Singapore would soon turn to the promising technology industry and China did not want to be outdone, although it was still far behind the competition. Hong Kong’s Prime Minister himself suggested abandoning communist ideologies to Xiaoping, who was also visiting the USA at that time and the Boeing and Coca-Cola factories, with which China began to do its first business, as well as the historic Johnson Space Center, from which all major NASA flights, such as the famous Apollo program, departed.

At this point, intoxicated by innovation from foreign countries, Xiaoping found himself with one foot in two shoes: on the one hand the desire to bring a little healthy capitalism to jump-start the Chinese economy, and on the other the need not to fall foul of the party’s communist rhetoric. Although the modernization of the technological market was a primary goal for Chinese leaders, in practice it proved more difficult than hoped. After being isolated from the rest of the world for too long, in the late 1970s China decided to take the first step, which was to send scientists and technicians around the world to learn from the most advanced nations. The second was to start the so-called Open Door Policy, opening for the first time the doors to foreign companies.

deng xiaoping open door policy<img width=”1200″ height=”831″ src=”https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy-1200×831.jpg 1200w, https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy-300×208.jpg 300w, https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy-768×532.jpg 768w, https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy-218×150.jpg 218w, https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy-696×482.jpg 696w, https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy-1068×739.jpg 1068w, https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy-607×420.jpg 607w, https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy-100×70.jpg 100w, https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy-150×104.jpg 150w, https://gizchina.it/wp-content/uploads/2021/07/Deng-xiaoping-open-door-policy.jpg 1280w” alt=”deng xiaoping open door policy” />Birth of

Special Economic ZonesIn order to

do so, in 1979 Deng Xiaoping created perhaps the most important change to China’s economic and technological growth, namely the creation of Special Economic Zones. While the nation would have maintained a liberal but state-controlled economy, in these areas the market would have taken a more capitalist path. The year 1979 thus marked the opening of China to foreign investments, encouraging joint ventures between Chinese and foreign companies, with tax incentives and aiming to create products designed for export. A market in which the price would no longer be decided by the state but by the market. The results would soon arrive: from 1979 to 1982 it is estimated that there were 6,000 billion dollars of volume with foreign countries.

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Deng therefore set up a series of cities with autonomous economic administration with a precise geographical strategy in the Pearl River Delta, a strategic position both because they were port areas and therefore exchanges by sea, and because the cities were close to other sensitive areas, towards which migration flows had been created due to the crises of the previous years. Therefore, among the first Special Economic Zones there were Zhuhai, Xiamen and Shenzhen, located a few kilometers from Macao, Taiwan and Hong Kong. The case of Macao, a former Portuguese colony, does not interest us too much, because over the years its market has focused on gambling, becoming a sort of eastern Las Vegas.

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importance of Taiwan

Taiwan

is

quite

different, whose efforts in the 1970s by Premier Chiang Ching-kuo quickly turned it into a highly industrialized island, succeeding in a titanic feat, to say the least: becoming a leader in the

world economy. in the semiconductor market. This was possible thanks to strong government investment and the creation of the Industrial Technology Research Institute, where engineers from the most advanced United States were invited to teach Taiwanese students everything they needed to know. It was from this institute that realities such as UMC, Taiwan’s first chipmaker, and TSMC were born. While UMC has never broken into the mainstream, focusing on modest products such as toys and watches, TSMC has fared quite differently. Thanks to its partnership with Philips, it could count on more advanced technologies that allowed it to become one of the biggest chipmakers in the world over the years. Whatever smartphone you have in your pocket, whether it’s an iPhone or a Xiaomi, there is a good chance inside there is a chipset from TSMC.

And don’t forget that in Taiwan in the 90s MediaTek was also born. It was created by UMC as a startup for the multimedia sector, creating chips for CD and DVD players, an area so far monopolized by the most advanced Japanese chipmakers. The trick was to offer low-cost solutions by outsourcing the physical production to “sisters” UMC and TSMC, conquering the CD and DVD market of the time with customers like Sony, LG and Philips. But soon the management realized that the future of technology would have shifted towards telephony and so it was that MediaTek pointed in this direction, aiming to offer manufacturers low-cost solutions but flexible in customizations. These were the keys to the success that led MediaTek to become the main supplier of chips for smartphones in China, coming in 2020 in first place with more than 30% of global shares.

In short, without a shadow of a doubt TSMC and MediaTek have contributed to the birth, growth and explosion of technology in China. Of course, one might wonder why Taiwan and South Korea have managed to break through in the semiconductor market, while the more impressive China doesn’t have a company to match TSMC, but maybe we’ll talk about that again.

Shenzhen, the Silicon Valley of China

At this point, from Xiamen and neighboring Taiwan we move to China’s Silicon Valley, the city where we can say the technological China we know today was born. I’m talking about Shenzhen, a city where 90% of the world’s electronics come from. To understand its evolution, in this case too we need to talk about the migratory flows towards nearby Hong Kong, a former British colony where in the 1950s many Chinese fled, increasing its population but also its human resources, giving rise to the development of the Chinese economy.and new companies and thus manpower, skills and capital. Hong Kong soon became an ideal destination for Asian refugees: it was a very rich country, with low taxation, little corruption, 0 public debt and a liberal economy with little state intervention and equal pay for men and women.

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evoluzione di shenzhen evoluzione di shenzhen

To curb the inevitable flight of people, Xiaoping decided to revolutionize Shenzhen, making it go from a small fishing village with 30,000 inhabitants, to a megalopolis that would desist emigration. And I would say that it has succeeded, since today it has more than 12 million inhabitants, in fourth place among the cities with the highest number of billionaires. It has grown so much that in the 1990s it even set up its own financial stock exchange, even considering the idea of its own currency. And it was in Shenzhen that China’s first McDonald’s opened in 1990, symbolising the now established global rather than nationalist mentality. Shenzhen became one of the four Guangdong Tigers, together with Canton, Dongguan and Huizhou. In this regard, Dongguan is another very important city for the technological development of China, as it is here that BBK and all the companies that have derived from it were born.

And so let’s go back to talking about Shenzhen because this is where three companies that would prove to be very important for China’s technological development were born in the 1980s. I’m talking about ZTE, Huawei and Foxconn. But let’s go in order.

The birth of ZTE

As I told you before, China had sent employees around the world to study in the most advanced nations. And so it was for Hou Weigui, who visiting the United States realized how far behind China was in the field of semiconductors, at a time when the American Intel and Texas Instruments led the market. So Weigui founded what was then called ZTE Semiconductor, a quasi-public company set up under the auspices of the Ministry of Industry and the Ministry of Aerospace so that China could also enter this market. However, they soon realized that the investment required would have been too expensive and so it was decided that ZTE would focus on the telephone market.

Also because it was There was a strong need for China to update its infrastructure, also to support this economic boom. At the time, in fact, there was no real national telephone network, there were only a few connections between the capital Beijing and the main cities. A necessary component to build up this infrastructure were the telephone switches, the components that connect two numbers.

sede ztesede zte

The birth of Huawei, between lights and shadows

But it was necessary that someone build them, these switches, and in addition to ZTE in 1987 another company was created to perform this task. I’m talking about Huawei, founded by Ren Zhengfei, an engineer formerly in the military who decided to jump into the technology market. His goal was to help China build its telephone network and to do so he created a business from scratch, importing components from abroad: initially from a company in Hong Kong, then also from companies such as Alcatel, Ericsson, Motorola and Nokia. The plan was the following: sell these foreign components to Chinese companies and in the meantime do reverse engineering, i.e. study these components to understand how to make them in turn. And in fact, 3 years after its birth, Huawei was able to build its first switch, arriving in 1993 to make the most powerful switch that could be found in China.

sede huaweisede huawei

And it is here that the first hypocrisies of a government that on the one hand waved social and market freedom and on the other implemented authoritarian behavior began to emerge. Just think of the Tiananmen riots of 1989, born in a China that promised more political freedom but in practice repressed those who opposed the party doctrine. Hypocrisy of the kind would continue later on: after having encouraged the entry of foreign companies, in the mid-1980s the Chinese government decided to take over the country’s economy.

n the ’90s China started a policy of

supporting domestic telecommunications manufacturers such as Huawei and ZTE, while limiting access to foreign ones. A manoeuvre that aroused dissent, with the Western community that started accusing China of favouring the entry of foreigners only to copy or steal their technologies.

The other aspect that raised doubts about Huawei’s growth was state intervention. Thanks to its technological achievements, in fact, Huawei won the contract for the construction of the army’s telecommunications network. This was an important economic goal for Huawei at the time, a promising company but one that still didn’t generate enough money to sustain its ambitions. Just think that in 1998 Huawei received loans from the state for 510 million dollars, or 45% of all the money Huawei spent that year. As Ren Zhengfei himself said, “Huawei was naive to choose telecommunications as its starting business.It was not prepared for such strong competition, with rival companies overseas worth billions. If the government hadn’t been there, Huawei would no longer exist

.”huawei ren zhengfeihuawei ren zhengfei

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The importance of FoxconnAfter

talking about ZTE and Huawei, I can’t not talk about another very important company, namely Foxconn. Like TSMC, it was founded in Taiwan and in 1988 it opened its first factory in China, where it now has more than 30. The success came in the mid-90s, when Foxconn proposed itself as a factory for all those Western companies that saw in Chinese labor a significant economic advantage. The icing on the cake came in 2006, when Apple decided to create its first phone by entrusting its production to Foxconn: we all know the success story of Apple that will follow. Among other things, the Chinese government included the city of Zhengzhou in the first mentioned Special Economic Zones just to help Foxconn in the manufacture of Apple phones.

It

is no coincidence that today it is also known as “iPhone City”, because hundreds of thousands of Apple phones are made here every day.

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it is by all accounts the world’s largest supplier of electronics manufacturing services: its main customers are Apple, Xiaomi and Nokia, but if you have a Play console in your living room

, you’ll need to buy one.

Not to mention that among its subsidiaries we find Belkin, official producer of Apple accessories, FIH, the company that produces Nokia, but above all another technology giant like Sharp. Foxconn is not only one of the largest employers in the world, but also one of the companies with the highest turnover, given that from here passes about 40% of all consumer electronics sold in the world.

foxconn partnerfoxconn partner

The economic leap of the new millenniumAt

this point, in the ’90s, China finds itself at home with companies such as ZTE, Huawei, Foxconn and TSMC. In a few years they would become giants and cardinal points in the world market, even if in the ’90s they had to fight against the stigma of Made in China that made them be perceived abroad as not very valid. And so companies like Huawei found themselves in a certain sense forced to maintain a lower price policy compared to foreign competitors. For this reason, in the 1990s Huawei’s overseas expansion was concentrated in allied countries, such as Hong Kong and Russia, or developing countries, such as Thailand, Brazil, and South Africa. But real economic and technological growth for China would begin with the 2000s, starting with the nation’s entry into the World Trade Organization.

It will be during these years that ZTE and Huawei will begin to

China’s private sector will continue to invest in the private sector, which in 2000 accounted for 70% of total GDP, thus reducing the poverty rate from 53% in 1981 to 8% in 2001. China will continue to invest in the private sector, which in 2000 accounted for 70% of total GDP, thus reducing the poverty rate from 53% in 1981 to 8% in 2001. In the following years China will become the biggest country in the world for exports and imports, becoming today the 2nd economy in the world, with forecasts that give it the 1st place by 2030.

This is the story that made China the technopower we know today, a story inevitably made of lights and shadows, made of passion, willpower but also many hypocrisies and ugliness. Some might say that without the enormous sacrifices faced by the people, the Chinese miracle could not have happened, and they would probably have a point.

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