China Tech: Disputes Over Trade Tariffs and IP Theft Likely to Continue for Years
Don't look for a quick resolution to the trade battle between the U.S. and China. Our relationship with China is likely to remain rocky for the foreseeable future. There will be ups and downs, but the contest will continue until the global economy begins shrinking - and nobody wants that to happen.
"The tech industry has become a key battleground in the trade fight between the world's two largest economies. The U.S. cited alleged Chinese theft of U.S. intellectual property as justification for threatening tariffs on Chinese goods worth $50 billion. President Donald Trump has also threatened to target Chinese products worth an additional $100 billion," according to CNN.
It's absolutely fascinating how technology has become a key part of the battle. China has made huge investments in technology infrastructure, development, training and education. In China, they know technology is the key to future growth, and they are pursuing aggressive policies to become the leader in technology innovation.
It genuinely concerns me that we haven't developed a coherent strategy for countering China's growing dominance in the global tech industry. I believe we need to speak up and add our voices to the conversation in Washington. Doing nothing or reacting too slowly would have potentially disastrous results for the U.S. economy.
At this point, it should be obvious that China and the U.S. are like two champion professional wrestlers. We're rivals, not enemies. Nobody wins if someone lands a knockout blow. Both sides want the match to continue for as long as possible. Neither side wants to lose. But we'll need to stay competitive if we want to survive.
IBM Stock Get Hammered; Does Big Blue Have a Strategy?
Meanwhile, IBM stock took a nosedive this week as the venerable tech giant struggles to gain a footing in the market for cloud computing.
"IBM slumped more than 7.5 percent Wednesday, making for the stock's worst day since April 2013, as analysts and investors balked at lower-than-expected adjusted margins," according to CNBC. "The stock closed Wednesday at $148.79. That knocks more than $11 billion off the company's previous market cap of $148.2 billion and puts IBM well into correction territory at more than 13 percent off its 52-week high."
Some analysts predict that IBM will toss its legacy businesses overboard to concentrate on Watson, blockchain and quantum computing. But IBM's legacy systems still generate lots of profit, so it seems unlikely they will be jettisoned anytime soon.
Does Ginni Rometty have a turnaround strategy? From my perspective, I don't see a clear path for the company. I think they've rested on their laurels for too long, and now they're paying a huge price.
Is Anyone Really Prepared for GDPR?
Enforcement of the EU's General Data Protection Regulation (GDPR) begins May 25. Are you ready? The GDPR itself doesn't change existing law by much, but it allows for extremely heavy fines when violations occur. There are two levels of fines. According to the EU, lower level fines can cost you "up to up to €10 million, or 2% of the worldwide annual revenue of the prior financial year, whichever is higher." Higher level fines will cost you "up to €20 million, or 4% of the worldwide annual revenue of the prior financial year, whichever is higher."
When the GDPR kicks into gear next month, those fines will be an incredibly harsh wake-up call for any company that hasn't gotten its data privacy act together. Are you prepared? I certainly hope you are.