Ed Brzytwa is the Director for Global Policy and the Information Technology Industry Council or ITI. There a lot of household names in the roughly 60-member roster of companies that make up ITI, from Apple and Intel to Nokia, Samsung, Toshiba, and Yahoo. As Mr. Brzytwa described his members:
"They are service providers, they're manufacturers of information technology hardware, they are cloud computing companies, they are producers of ICT infrastructure. They do so many different things to innovate on a daily basis, all around the world, and they are critical to the entire economy, globally."
These comments, like those in the last entry, were from things said at GBD's event last month on
China Trade: 5 American Views. As we listened to Mr. Brzytwa then three things stood out: 1) the sheer size, and hence importance, of the Chinese market; 2) the worry that tensions between the United States and China might double the difficulty of the challenges faced by foreign firms in China; and 3) the obstacles to business inherent in certain Chinese policies. You will want to listen to the full presentation, but here is a little more from each of those baskets.
The Size of the Market. "In 2014," Mr. Brzytwa said, "the overall [global] size of the IT [information technology] market was estimated to be $404.5 billion, [with] the consumer side of that ... a little bit bigger than the business side." He commented that "Any service that you can possibly imagine that we use in the United States, the Chinese are also using those services, particularly through things like WeChat, a Chinese instant messaging service.
As for China, Mr. Brzytwa said:
"Spending on ICT [information, communications and technology] continues to grow in China: $126.6 billion US dollars [in 2014], and that just continues to increase. ... The Chinese government has made it a very strong policy to up its game on ICT. ...
"They realize ... this is a global sector, [that] it's a global competition. What they've said is, we want to digitize our industry, manufacturing, we want all of our manufacturing sectors, our agriculture sector, medical device I assume, to use information and communications technology.
"... That means things like the Internet of Things will be important for China. That means e-commerce will continue to be important to China. China is very proud of its e-commerce sector, where anybody can basically buy anything in China through the Internet and ship it. Smart cities - that's a city that is basically ICT enabled-that is important for China, [as is] generally ICT infrastructure, connecting people to the Internet."
The Foreign Policy Wildcard. On this front, Mr. Brzytwa said,
"We do not want to experience any sort of broader trade friction because of what happens with the [Trump]
Administration and the policy of trade going forward." With apologies for mixing a bit of Comment into this Context section, we would note that the risk is not confined to trade policy issues. Consider, for example, this line from a
Los Angeles Times story of last summer:
"Just last month [July 2016] Chinese Internet users were posting pictures of their smashed iPhones to protest Washington's objections to Beijing's territorial claims in the South China sea."
The Challenge of China's Commercial Policies. Mr. Brzytwa said he thought the biggest challenge for ITI members in China was
"competition with Chinese companies...[because] the Chinese government has promoted national champions in this area." But there are other issues as well, such as China's approach to
cyber security and its policies on
data localization, both of which Mr. Brzytwa discussed in more detail.