What's new for 2020: APAC set for another year of tech turbulence

Despite an overall market slowdown, APAC's businesses continue to spend big on tech in 2020, providing an attractive opportunity for Western suppliers.

Another 12 months is nearly over and what have we learned? In many ways we end 2019 as we started it: with a US-Sino trade war casting a long shadow over the region; China continuing sophisticated state-backed hacking operations to become technologically self-sufficient; and foreign firms operating in APAC stuck in the middle. Yet despite an overall market slowdown, the region's businesses will continue to spend big on tech in 2020, providing an attractive opportunity for Western suppliers.

The biggest potential gains could well come outside of China, especially in ASEAN leaders like Singapore.

The trade war rolls on

Donald Trump's trade war is set to drag on into 2020, even though there are signs of progress in negotiations. The tit-for-tat escalation that the ‘dealmaker-in-chief' began in 2018 has ratcheted up tensions between the two superpowers all year, and around 80% of 60+ economists polled by Reuters expect the situation to worsen or stay the same by the end of next year.

Tech firms have been drawn into the war, mostly against their will. Directly in the line of fire is Huawei which was banned from supplying 5G networking kit to US carriers and put on a Commerce Department blacklist, which will hurt multiple US suppliers of the firm. It's telling that the move persuaded CEOs of some arch rivals including Qualcomm, Intel, Alphabet, Cisco, Broadcom, Micron Technology and Western Digital into trying to persuade Trump to ease the ban.

The problem with Huawei actually goes beyond the trade war, as the US is blacklisting the firm not simply because it believes it's been given an unfair advantage by the Chinese state, but because of national security concerns. The latter will be hard to shift, and commentators are concerned that China may eventually respond in kind, by finding a way to make life difficult for US tech firms operating in the Middle Kingdom.

In the meantime, the future doesn't look too bad for the Shenzhen giant, which last year claims to have spent $11.3 billion, or 15% of its annual revenue, on R&D, more than all the other telecoms kit makers combined. It's also picking up plenty of 5G business across Asia, Russia and even in Europe. Washington has not been successful in lobbying its allies to block the firm: the UK is typical in taking a pragmatic approach, signalling its intent to continue using the Chinese kit in non-contentious parts of its 5G networks.

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