Cranes handling containers at the Port of Baltimore Pexels/David Dilbert
Shipping

COLUMN | Look for the kill switch: balancing trade benefits and security concerns amid China's manufacturing dominance [Grey Power]

Michael Grey

Is your refrigerator/television/toaster spying on you? Your mobile telephone most certainly is, judging by the helpful suggestions it offers you when it should be just minding its own business. And how worried should we be about China’s remorseless grasp of our everyday technology?

Practically every day, there is an article in the media, sometimes bordering on the hysterical, about the dependency of half the developed world on Chinese manufacturers and their supposed close links to the Communist Party.

In the UK, there is growing concern about the nation’s biggest water company possibly being controlled by a Chinese utility (it is indebted by sums that equate to the GDP of a medium-sized country, thanks to an Australian hedge fund, and only the Chinese have enough cash to buy it.).

It is surely somewhat unlikely, and self-defeating. that they would turn the taps off, as the fearful allege they might.

There is a diversity of views about all of this, with those tending towards paranoia offset by those who point out that if you wish to sell stuff, you emphasise its reliability and the benevolence of the supplier and aim to reassure, rather than terrify, the customer with threats of a “kill switch” that will immobilise the product.

The debate, like those cheaper Chinese cars currently overwhelming the European market, will surely persist. And if we have abandoned so much of our manufacturing to the East, we have to concede there is a probable downside to our dependence.

Perhaps we should 'keep calm and carry on,' while doing something constructive about our vulnerabilities.

One might also suggest that the worries about malevolent external influences, should the political situation take a turn for the worse, is not half as frightening as the prospect of sophisticated hacking that could immobilise pretty well everything.

Perhaps we should “keep calm and carry on,” while doing something constructive about our vulnerabilities, like recovering our ancient facility for making things closer to home, and upgrading our cyber security.

Much of this current fearfulness comes from the other side of the Atlantic, where the Trump administration has a two-pronged approach; terrifying Americans about Chinese chips taking control of everything and employing tariffs to reinforce local production.

Early on, they became very exercised about Chinese container cranes, with suggestions that these modern megaliths were spying on the niceties of US trade and could be rendered inactive at the touch of a button in Beijing. Terminal operators were urged to exchange their equipment for cranes without such sinister capabilities.

Quite where they were to come from was somewhat unclear, and the average US stevedoring company is hardly spoilt for choice, cranewise.

A combination of Trumpian bluster and threats has at least begun something of a US national shipbuilding strategy, albeit with a lot of foreign imported expertise.

Then there was the awful discovery in Washington that US shipbuilding had virtually evaporated and that a high proportion of the merchant vessels coming into US ports were built in…..China!

Here one can perhaps argue that within a few months, a combination of Trumpian bluster and threats has at least begun something of a national shipbuilding strategy, albeit with a lot of foreign imported expertise and their use as bargaining chips in US Chinese trade negotiations, which has worried blue-collar voters.

Whether this strategic aim can grow and be sustained in the long term will depend on the US industry becoming infinitely more competitive. Some have suggested that it makes a lot more sense for the US to just get on with doing what it does best, and not bother about some sort of shipbuilding resurrection.

But back to the original question about whether we should have sleepless nights about the intelligence of our manufactured goods, which is something we really have to get used to if we wish to remain “on-grid.” It then becomes a judgement about the relationship we have with the government of the supplying country and its potential for harm.

And this must be balanced against the value that the supplier’s government puts on international trade. Things will have to get very nasty before they turn off the toaster, or press the kill switch on the shiploader.