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Invest in Pakistan Summit: Can Pakistan Benefit From US-China Tech War?

About 200 Pakistani-American and other American investors met at Invest in Pakistan Summit in Silicon Valley on October 3, 2019 at San Jose Sheraton. It was hosted by the Pakistan Embassy in Washington DC. One of the sessions I found interesting dealt with the opportunities presented to Pakistan by US-China technology war sparked by US President Trump's actions against Chinese technology giants Huawei and ZTE.  In response to the US threat to restrict access to American core technology, China is aiming to develop and produce 40% of the semiconductors it uses by 2020 and 70% by 2025, according to Washington-based CSIS report. It is estimated that China needs about 500,000 engineers to achieve this goal. Can Pakistan, a reliable Chinese ally, train and provide some of these engineers?

US-China Tech War:

The technology war between the United States and China has been going on with the roll-out of the 5G next generation broadband wireless technology.  China has developed its 5G technology in an attempt to become independent of the technology developed and controlled by companies in the United States and other western nations.  US has been actively trying to stop adoption of Chinese company Huawei's 5G technology in Europe, East Asia, Australia and New Zealand. So far, the US has had limited success while China's Huawei is continuing to win customers around the world.

Tech Supply Chain Bifurcation:

President Trump has also attempted to block Chinese companies' access to semiconductor components and software developed and sold by US companies. Both Huawei and ZTE have been riding a roller coaster with President Trump's daily tweets on this issue. It has affected reliable access to communication chips, Android operating systems and Google apps store.

The net result of it is that the Chinese have lost faith in US companies' reliability. They are now seeking to to create their own supply chain free of companies from US and its close allies in Europe, East Asia and elsewhere.

China's Plans:

China is currently a net importer of technology. The country wants to move “up the value chain” from final product assembly using imported components to creating advanced technology in China itself, but imports of chips and technology will be the norm for many years to come, according to a report by James Lewis of Center for Strategic and International Studies (CSIS) based in Washington DC.

As of now, only 16% of the semiconductors used in China are produced domestically, and only half of these are made by Chinese firms. It is dependent on foreign suppliers for advanced chips. China aims to produce 40% of the semiconductors it uses by 2020 and 70% by 2025, according to the CSIS report.

Opportunity For Pakistan:

China will need 500,000 engineers trained in chip development over the next 5 years to meet its goal of producing 70% of semiconductors within the country, according to Pakistani-American entrepreneur Dr. Naveed Sherwani who presented at the Invest in Pakistan Summit in Silicon Valley.

Naveed and his wife Sabahat Rafiq see this as an opportunity to train a significant number Pakistani engineers in semiconductor chip development to meet China's needs. This will help develop Pakistan's tech-oriented human capital and open up the possibility for Pakistan to build its own chip design and development industry.

Sabahat said she is already training some engineers at an institute in Lahore for this purpose.  She is hoping to expand it to accommodate more trainees in near future.

Naveed currently heads SiFive, a Silicon Valley startup specializing in RISC V microprocessor cores for customized systems on chip (SoC) development.  RISC V is an open source chip architecture developed at UC Berkeley. It is the hardware equivalent of open source Linux OS software.  Naveed is promoting SiFive in both China and Pakistan for "low-power embedded microcontrollers (as small as 13.5k gates) to multi-core applications processors".

Cloud Design:

Naveed talked about the availability of cloud-based advanced chip design tools that Pakistani chip designers can take advantage of. Among the top vendors offering such tools is  Amazon Web Services (AWS).

AWS says it "offers a secure, agile, and scalable platform with a comprehensive set of services and solutions for high performance design, verification, and smart manufacturing, supporting electronic design automation (EDA) and rapid semiconductor innovation in the cloud. Semiconductor companies, including fabless and integrated device manufacturers, and their IP and foundry partners can benefit from the massive scale of AWS infrastructure to design next gen connected products".

Here's how AWS describes its cloud-based chip design tools offering:

"Semiconductor design simulation, verification, lithography, metrology, yield analysis, and many other workloads benefit from the scalability and performance of the AWS Cloud. For example, compute performance for these applications is enhanced by latest generation EC2 instance types, including the z1d. Run more jobs per core with z1d, the fastest single thread performance of any cloud instance delivering 4GHz sustained CPU, 16 GiB RAM per core, and local NVMe storage. Our virtually unlimited cloud storage and high performance computing (HPC) capability enable you to innovate faster, rapidly design and verify new products, and scale seamlessly to meet increasing demand".

Summary:

US-China technology war has recently been triggered by US President Trump's actions against Chinese technology giants Huawei and ZTE.  In response to the US threat to restrict access to American core technology, China is aiming to develop and produce 40% of the semiconductors it uses by 2020 and 70% by 2025, according to the CSIS report. China needs about 500,000 engineers to achieve this goal. Can Pakistan, a reliable ally, train and provide some of these engineers? Pakistani-American entrepreneur Dr. Naveed Sherwani and his wife Sabahat Rafiq believe the answer is an emphatic Yes. This will help develop Pakistan's tech-oriented human capital and open up the possibility for Pakistan to build its own chip design and development industry.

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Views: 41

Comment by Riaz Haq on Friday

#China enables #Pakistan to become a #defense exporter. #Technology transfers from China have enabled Pakistan to begin producing #military hardware on its own. It's true with the fighter jet that now forms the backbone of #Islamabad's defense strategy.
https://asia.nikkei.com/Politics/International-relations/China-enab...

When Pakistani Prime Minister Imran Khan began a high-profile trip to Beijing on Tuesday, he was closely shadowed by influential army chief Gen. Qamar Javed Bajwa. But while Khan met with senior Chinese leaders and businessmen, Bajwa was being received by senior army generals, an indication of the close defense ties between the countries.

Those ties are so close, in fact, that China is helping Pakistan become a defense exporter that sells arms to countries like Myanmar and Nigeria.

Pakistan has relied on Chinese military hardware for more than five decades, though Islamabad has used every opportunity to also gain access to Western defense equipment, notably from the U.S.

Pakistan's leaders have long lamented their country's lukewarm ties with the U.S., which have sometimes resulted in reduced arms supplies. This contrasts to the situation with China, which has gradually but consistently nurtured Pakistan as a close ally.

Technology transfers from China have enabled Pakistan to begin producing military hardware on its own. This is true with the fighter jet that now forms the backbone of Islamabad's defense strategy. Pakistan is also increasingly foraying into the production of tanks and other equipment for land forces thanks to technology transfers from China.

Similarly, Chinese hardware is allowing Pakistan to expand its navy.

According to senior government officials who spoke to the Nikkei Asian Review, in the past year Pakistan has redoubled its push to sell batches of JF-17 Thunder fighters that it has built with Chinese assistance. Pakistani government officials said the JF-17 Block III, a version of the JF-17 that will be rolled out in 2020, will include more advanced radar, additional weaponry and other new technologies.

Officials in Islamabad say China has repeatedly helped Pakistan create a more commercially feasible defense industry so that purchasing expensive hardware does not cripple the country's already weak economy.

-------------
"Affordability and high quality are the main selling points of the JF-17," said retired Air Marshal Shahid Latif, a former Pakistan Air Force general previously involved with the JF-17 production project. Encouraged by the publicity given to Myanmar's purchase, Pakistan in the past year has discussed future sales to Malaysia and Azerbaijan as well as sales of additional fighters to Nigeria, which now has three JF-17s.

In the coming years, Pakistan's reliance on Chinese military hardware will grow. China has signed a contract to supply eight new submarines to Pakistan's navy, the largest defense deal ever between the countries. Although neither party has revealed the value of the contract, Western defense analysts say it could be worth from $4 billion to $5 billion depending on weapon systems and other add-ons.

Comment by Riaz Haq yesterday

A More Peaceful #Pakistan Puts On An IT Charm Offensive In #SiliconValley. #Technology #Investment via

A More Peaceful Pakistan Puts On An IT Charm Offensive In Silicon Valley


David Bloom

Dr. Asad Majeed Khan

Pakistan ambassador to the United States Asad Majeed Khan at Silicon Valley event in October to promote his country's tech sector. 

(IMAGE COURTESY OF PAKISTAN GOVERNMENT)

Pakistan is pushing its IT sector to U.S. companies and investors, hoping international deals will translate to a bottom-line boost for the country’s struggling economy. 

The most visible part of this charm offensive came earlier this month with a day-long Silicon Valley conference in San Jose, Calif., backed by the Pakistani government.

“If I were to look at our overall economic performance, the IT sector comes out as one that has performed the best,” said Asad Majeed Khan, the Pakistani ambassador to the United States and one of the conference speakers. “The whole idea of doing the tech summit was to inform the companies in the Silicon Valley about what is our potential and what is it we can do together. ” 

More than 200 attendees heard pitches from 14 Pakistani startups seeking venture capital, along with panels on microelectronics, software development, artificial intelligence, gaming, medical innovation, and venture capital funding. 


Today In: Business

“Over the years, the government has not done as much as it should have in terms of focusing on expanding the IT sector,” Ambassador Khan. “In past two or three years, though, we’ve seen some phenomenal growth.”

In part that’s because the country’s charismatic new prime minister, former international cricket star Imran Khan, has made the economy his top priority.

“The economy is his primary and principal focus,” Ambassador Khan said. “The manner in which he’s approaching foreign policy is rooted in his desire to turn around the economy and provide jobs for the people.” 

As part of a broader set of initiatives, the country is trying to grow its already substantial tech sector and attract international investment, especially from the United States and neighboring China, which already has built a vast deep-sea harbor and naval port in Gwadar, on the Arabian Sea, as part of the China-Pakistan Economic Corridor.

Pakistan already generates at least $4 billion a year in IT exports, though the ambassador said the number is likely higher because some IT-related payments get lumped in with international remittances. The biggest areas of operation are software development, Business Processing Offices and call centers. Now, the country hopes to move into more high-end sectors such as AI, gaming and visual effects. One potential opportunity discussed at the San Jose conference is moving into RISC-V microchip fabrication and export.

“Our IT success story is not as widely known and as widely shared as it should be,” Ambassador Khan said. “If you were to only compare the numbers, the actual potential, then Pakistan has really come a long way in terms of harnessing the IT potential.” 

The ambassador reels off a number of statistics suggesting the country’s resources and opportunities:

  • As of 2017, Pakistan had 207 million residents, making it the world’s sixth-most populous country, roughly the size of the equally fast-growing Indonesia and Brazil.
  • Pakistan also has one of the world’s youngest populations; in 2007, the last year such official data was available for the country, 75 percent of the country was under the age of 35, according to the United Nations. Khan said the number now is closer to 64 percent, still a prodigious tilt toward a younger, more tech-savvy population.
  • Pakistan is one of the world’s largest English-speaking countries (English is one of two official languages), behind India, the United States, and Nigeria. Its English-language population is much larger than the United Kingdom, the Philippines, Germany, and smaller former British colonies.
  • The country has 161 million cellphone users, 70 million of them on more modern 3G and 4G networks, and 72 million broadband users.
  • The country turns out 35,000 graduates of IT-related training programs every year.
  • The country has no restrictions on foreign ownership or repatriation of capital.
  • The Pakistani government just issued an e-commerce policy that includes plans to create 15 IT parks around the country to house up to 5,000 companies.
  • Issues with crime, corruption and security appear to have improved significantly compared to 10 years ago, according to international indexes, particularly in major cities such as Karachi.

There are several continuing challenges, however.

During the United Nations’ opening-week ceremonies this month, Imran Khan spotlighted the plight of Kashmir, the disputed region wedged between India, Pakistan and China. India dramatically ramped up tensions in the region when it recently revoked special autonomous status in its part of the region, and imposed curfews and other security measures while locking down media and social media.

Imran Khan’s attempts to reach out to India’s Hindu nationalist-led government have so far been largely ignored. It’s an issue when two of world’s nuclear powers, which have had a string of border wars since they left British rule during the bloody 1947 Partition, continue to have poor relations along their lengthy border.

As well, Pakistan’s Northwest Territories, abutting Afghanistan and relatively autonomous and beyond central government control, are still something of a Wild West, used by Afghani and Islamist anti-government forces as bases.

And the economy still faces challenges that have forced it to seek assistance from the International Monetary Fund.

“We need to put our house in order,” Ambassador Khan said. “We need to stop the bleeding of state-owned enterprises. We’re rationalizing the tariff structure for (electrical) power, with a focus on exports. (The prime minister) wants to bring in more foreign direct investment. We are singularly focused on improving the ease of doing business.”

As part of that, Pakistan plans to continue its outreach to U.S. tech companies. The San Jose gathering is expected to become an annual event, and smaller regional gatherings will be held around the United States in coming months, Ambassador Khan said.

“The scene is set for Pakistan to take the next stage of development,” Ambassador Khan said. “That’s where we are focused. We hope to leap up the list of ease of doing business (measures) by 20 to 30 notches.”

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