Cisc-o-no! 'We’re being uninvited to bid' on China deals admits CEO as Middle Kingdom snub freaks out investors Cisco warned of problems on the horizon as it wrapped up it fiscal 2019 financial results [PDF]. For the calendar quarter, ended July 27: Revenues of $13.4bn were up 5 per cent from Q4 2018, beating Wall Street's estimates by $40m. Net income of $2.2bn was down 42 per cent from $3.8bn in the year-ago quarter. This was …
Sounds fair and reasonable.
No it is not. Trump's banning Huawei (and forcing other countries to adhere the "rules") is "fair".
China banning Cisco is "breaking the contravention of free trade and WTO agreement yadda, yadda, yadda, blah, blah, blah ..."
So Trump has "postponed" the tariff increase of Apple products ... So when is Trump going to postpone Cisco-branded products?
I can see Trump can dish it but can't take it. Not when American businesses own his cajones.
No, you misread the current short-term appearances for the long-term problem. Trump's lumps and bumps are a convenient excuse, but also demonstration of the 'why' in China's actions.
China will build its own industries until it no longer needs anything from the West. If it can source raw materials internally, it will do so. If technical knowledge is needed it will be acquired from 'elsewhere' until the domestic expertise suffices. Manufacturing of anything can be spun up from nothing given direction and money. (and sometimes they had Western 'investments' to accomplish this).
China wishes to be completely independent in its needs from world economies. Only by this can it *act* independently from other world opinion, and against world interests if it wants to. China wishes to be a free agent, acting in its own interests, forever. Impunity is sweet for a previously conquered country.
They have been incredibly consistent at all this. Compare the bleats of "need more STEM graduates" we hear from our leaders, vs. 1.5 million science and engineering degrees in 2006 alone. How do you dominate sciences and engineering and manufacturing? Grow your own experts! It's what a forward-thinking government would do.
What's the problem with China building industries and being independent of the USA? Truth be known they are probably totally independent now, most of the US technology is actually manufactured in China today. The US needs China, not the other way around.
They were independent of the Western world for a long time, and the West came begging to trade and suck up all the cheap labour in China.
the USA did exactly the same thing and now its fast becoming a dinosaur.
That is the real reason for all the "lumps and bumps", just final death throes of a big ugly American monster, trying to pretend its still relevant.
"What's the problem with China building industries and being independent of the USA?"
What's the problem with a country being independent? None in theory.
What's the problem with a murderous, Orwellian dictatorship superpower able to act with impunity throughout the world? Well, I assume that one's clear. The US doesn't exactly have an unblemished record in that respect and they are infinitely preferable to Chinese preeminence. Can you imagine what the US's actions would have been in, say, Vietnam, if they didn't have to worry about public opinion either at home or abroad? They could have, for example, rounded up a million Vietnamese and shoved them in concentration camps. Just off the top of my head.
"or killed the Vietnamese people with Napalm, and made a big joke about it..."
I should point out that the Vietnam war ended when the US pulled out. They didn't nuke Hanoi.
The only thing saving the people in Hong Kong from all those APCs stationed at the border is other countries' opinions.
I assume that nobody here lives in Taiwan, Tibet or HK.
@mithrenithil - "I'm pretty sure if it was in the US, they protestors would have been already sent in the troops. If they had done the same in a major airport there would probably be casualties by now..."
Could you imagine a US Gov not backing down for 2 months after an entirely peaceful protest of about 1/4 of the population (estimates vary)?
To be accurate, there have been casualties, but not many. I'd like to highlight how people have been continuing peaceful protests in many ways, such as "Lennon Walls", and smaller demonstrations by groups such as lawyers and civil servants. How long can a Gov go, "Nah Nah Nah, I can't hear you!"?
Probably not, but there are probably quite some people here that live in
Iraq
Iran
Syria
Libya
Honduras
Vietnam
Chile
Guatamala
Honduras
Panama
Haiti
Venezuela
Cuba
Yemen
Philipines
That may have a slighly different opinion of who the worst oppressive regime is of the two.
And I am sure that I've only touched on the most visible examples. But go right ahead and pretend that China would be even worse, whatever makes you sleep at night.
The USA believes itself to be the leader of the free world because
1) Hollywood has made countless films describing how the USA won WWII
2) The US dollar is the defacto international exchange currency
3) the USA has the most powerful navy in the world and is not afraid of showing it
4) the USA is quite capable of invading other countries (that don't have nuclear warheads) and is not afraid of doing so (if there is petrol to control)
@DavCrav - "I assume that nobody here lives in Taiwan, Tibet or HK."
I live in HK.
I think that the Vietnam war is an example of how badly things can go if you focus on a doctrine (domino theory) rather than doing what's right.
The situation here in HK at the moment is complicated, but I think most people appreciate outside support for peaceful democratic reform, the rule of Law and an end to violence.
I don't know about Hong Kong, but I do know about little Islands and Territories in the Carribean, like Honduras and Jamaica. They used to be British Colonies and were amongst the richest countries in the world.
They hated the British and wanted them out of their countries so they could "self rule" (Same as Hong Kong) and today they are amongst the poorest countries in the world, with nothing but Tourism to generate any income.
They are little more than beggars these days, pleading with tourists to give them money. But hey, they are "independent" now and got rid of the British overlords.....
Hong Kong might regret the day they demanded independence.
> I assume that nobody here lives in Taiwan, Tibet or HK.
I actually live in Hong Kong so what I see maybe different from you. All I see is demonstration in 3-4 different districts every weekend since June which inevitably turn into riots. Major roads were blockaded for hours and police stations were surrounded by mobs of rioters, throwing bricks and metal barricades and flashing laser at police and setting fire to police stations. We also had people sitting in at the airport for 4 days, blocking people from boarding their flight and ended with a Mainland Chinese journalist being tied to a luggage cart and beaten by mobs before the police dispersed them.
If it were to happen in the US there would be a bloodbath already, but the police in here was so restrained that no one was killed and only one rioter was seriously injured when something struck her goggle. And yet we have American politicians condemning our police for violence against the rioters and warning them to back off.
@AC - Is that "All you see"?
As I said above, it's complicated, and your description leaves out many significant events. For this reason, I think it is necessary to have an independent commission of enquiry, led by a judge, with the power to call witnesses. That is one of the demands of the protesters.
I attended 3 of the early protests, that were entirely peaceful.
When the violence started (it is unclear by who), the riot police went in with excessive force. There is no reason to continue to beat a protester who is on the floor, curled up, with batons and shield edges. Protesters and journalists were hit in the head with tear gas rounds. Many police did not display their ID numbers.
Since then, protester violence has been mainly directed at the police and symbols of authority.
On 21 July, white-shirted suspected triads attacked train passengers (some returning from peaceful protests, but others were unconnected, and journalists were targetted) and police failed to respond: 2 officers were photographed strolling away ("retreating to call for backup").
That woman who was struck in the googles was blinded, and a bean-bag round was wedged into the broken goggles. Reports suggest that she was a first-aider, and not near violent protesters when struck.
Undercover police, dressed like protesters, assisted arrests in Causeway Bay; there is suspicion that undercover police have been inciting increased violence.
The Mainland Chinese journalist was reported to be taking close-up photos of protesters and not identifying himself before he was detained. I think the violence against him was unacceptable. In one video, a person in a white hat appears to be trying to shield him from blows from another person. The police were unable to disperse the protesters detaining him, an Ambulance crew were able to extract him with difficulty. The Airport Authority has now achieved peacefully, but court order and controls on entrance, what the police was unable to do with riot gear and force.
There's a lot more, as I said it's complicated. This cannot be resolved by escalating violence from the authorities. There needs to be an independent commission of inquiry, and people on all sides: police, triad, protester held to account for violence.
Riot police are objectionable fuckers wherever they are in the world. They do not know the meaning of "proportionate response", simply becoming attack dogs for the Establishment. Let's not pretend that the ones in Hong Kong are any worse than anywhere else.
"What's the problem with a murderous, Orwellian dictatorship superpower able to act with impunity throughout the world? Well, I assume that one's clear. The US doesn't exactly have an unblemished record in that respect and they are infinitely preferable to Chinese preeminence. "
I would argue that China treats it's citizens far worse than the US*. While the US has ingrained issues with racism, violence and surveillance, it's citizens are far more free. China's treatment of Nepal, it's Uighur minority and any political dissident is far beyond the pale.
The US, on the other hand, treats the rest of the world far worse than China does. Anything goes in the pursuit of the almighty dollar, from secret rendition and torture to toppling democratically elected governments to wars and invasions all over the globe. China rattles it's sabre around the China sea and has it's eyes on Taiwan, but it's 'imperialism' is economic - buying up assets and influence but also helping it's trading partners (especially in Africa) out of poverty.
What's the problem with China building industries and being independent of the USA?
Well exactly the same problem as with Russia being technologically independent of the US.
If they are developing their own technology then the US has little knowledge about that technology and its capabilities - it might be significantly better thn the US technology, but also that technology is now a competitor to US exports.
Fundamentally the issue is one of the US facing up to the fact that it is no longer the pre-eminent leader it likes to thing itself as being.
What's the problem with China building industries and being independent
To do so they have been imposing restrictions on imports and illegally subsidizing and dumping their products on international markets, which clearly violates WTO rules.
The US needs China, not the other way around.
Every expert will tell you the opposite. China losing a huge market for it's output will hurt them far more than the US.
just final death throes of a big ugly American monster, trying to pretend its still relevant.
The US is the biggest consumer market. Maybe China will surpass it some-day, but being a close number 2 will never make the US powerless and irrelevant. Not to mention that whole military thing...
"The US needs China, not the other way around."
It's not a one way or the other, they both need each other. The US needs a rich counterpart to buy it's debt, China needs the relatively rich people in the US to buy all the tat they produce. Gradually reducing Chinese exports to US is actually a good idea for both. China's economy can continue to grow, albeit more slowly, based on internal demand, while US can start building more of it's own stuff and itself rebuild manufacturing capacity and redressing the trade imbalance with China.
It's far better for both sides that the interdependence is unwound gradually rather than suddenly and drastically, which could be catastrophic for both.
Like the US and every imperial power in history they want to be in total control of their own destiny and as much as they can of the destiny of everyone else as well.
The first part is reasonable, the second is a worry to everyone else.
It is doing what every nation should do, it should be independent of outside sources where possible, especially on critical infrastructure and talent, but the West seems to have forgotten this lesson.
Multi-nationals also make this harder to put into effect in "open" markets.
It is doing what every nation should do
The trouble is that "nations" don't really have any clearly-defined existence and the pursuit of nationhood usually involves coercion. That coercion first involves territorial claims on adjacent nations (examples from history with current significance include Ireland, Kashmir, Taiwan, Tibet, Ukraine, but there are many more) and then expands to more distant nations whose resources are required to maintain the economy of the principal nation (see under colonialism).
And then of course there's the question of what really constitutes "national interest". Trump is pursuing an "America First" policy, but which Americans does it actually benefit? China's policies are not obviously benefiting school children assembling Amazon Echos or Uighurs or citizens of Hong Kong or Tibet.
And, of course, the collective result of national competition for economic and military supremacy has been an ongoing threat of mutual nuclear annihilation and the strong likelihood of irreversible climate change resulting in the potential destruction of significant areas of human habitat. "More of the same" doesn't really sound like the way forward, though it may be an inevitable limitation of the evolutionary process.
China has a pressing need to become independent of the USA. Looking at the US Debt Clock and in particular at the unfunded liabilities makes it obvious that sooner or later the US will be unable to meet its Social Security (pensions for people in the UK) obligations. When this happens there will be millions of destitute people with guns and nothing left to lose. The resulting carnage will make the US Civil War seem like a friendly dance.
When Social Security becomes insolvent, benefits will see slight cuts. There have been calls to do so for some time, but it's politically unpalatable while the fund is still on the plus-side. Hitting the crisis point will move political opinion in the right direction, far enough to make sanity win the day.
And do you know what else (other than cuts) would save Social Security? Lots of new immigrants...
Sanity - US politicians ????
Social Security is already in the red in that the income to the US government for SS is less than the payout from SS - the US government spent all the money in the years that it was in surplus and its assets now consist of a pile of government IOU's. The net SS position (payouts - income) will get steadily worse over the coming years as more US citizens reach pensionable age. By the time that the SS funds are exhausted (expected in 2035) the government will have had to spend over $3 trillion more in SS payments than it receives in SS payroll taxes.
Increasing the SS payroll tax rate and removing the cap on the amount of income that is subject to the SS payroll taxes would be a way of avoiding the problem - however such a tax increase (especially one that would affect them) is anathema to many US politicians.
They were happy to use components and know how from the US, Europe or elsewhere, the government wanted them to be fully independent, and they made half hearted attempts.
Now they have no other choice, as basic international law is not respected by the US and Europe, so they are forced to do it.
It is sad, as they were stopping their IP theft somewhat.
China will build its own industries until it no longer needs anything from the West
Moving everything in-house makes things more expensive due to reduced economies of scale and time and money needed up-front to develop such expertise. Increasing component prices will make it difficult to compete on the international (export) market, which will hurt their economy even more. Other countries without such trade restrictions, like Japan, Vietnam, or one of the other BRICS could pull ahead and take a chunk of their share of the world market.
The idiocy of our so-called leadership never ceases to amaze me. Why anyone in Cisco would think it was possible for the US government to ban purchase of Chinese kit while expecting Cisco to sell their kit into China is beyond me.
The actions the US have taken against the Chinese will have repercussions. I know that if I were Chinese I'd take the product bans and the arbitrary arrests as pure harassment and I'd want to push back -- hard. The Administration may not of thought of this because they're so bound up in their hubris that they think that everyone is beholden to us.
I can't wait till next year when we can have a go at getting rid of this crew before they screw us over permanently.
"arbitrary arrests"
I assume you are talking about the Canadian citizens arbitrarily arrested in China, but then the rest of your sentence makes no sense. Which Chinese people have been arbitrarily arrested in the US? If you mean the bent Huawei executive loafing at home awaiting the outcome of the extradition proceedings, China has sentenced to death a Canadian who cannot be executed even by China's own 'laws'.
But let's make the two sides equivalent, because it's the only way to justify the US bashing. US bad, China bad, therefore China as bad as US.
US bad, China bad, therefore China as bad as US.
There a several shades of 'bad'. China may be implementing some Big Brother monitoring on their citizens, but at least they don't seem to want to export their brand of government to other countries. They also are not involved in actively bombing countries, or waging economic war on governments that don't readily hand over their natural resources. This is probably why US 'bashing' (I call it facing up to reality, myself) a bit more prevalent.
If there was a scale of to being bad, the US would score definitely higher than China.
I would definitely not want the US to 'help' the country I live in.
Want to stop the 'US bashing'? Stop your government from bombing/overthrowing governments in other countries
They also are not involved in actively bombing countries, or waging economic war on governments that don't readily hand over their natural resources.
China would invade Taiwan in a week if the US merely announced it is no longer willing to start a nuclear war with China to defend it.
And you clearly don't know what's going on with the islands in the South China sea.
There's nothing to defend, it's hyperbole. If you're going to say a good superpower should be completely non-controversial and maintain Ghandi-esque levels of conflict avoidance, I can only laugh at the delusional claim.
Lots of cases where the US goes to war or otherwise uses its economic power and alliances to pressure other nations into changing their behavior have been widely hailed by most of the world as beneficial for all. Many times it even does so at the behest of its allies (NATO, UN, etc) rather than for its own interests.
In other cases, it is less clear-cut and criticism is justified. Nobody has a perfect tract record.
If you're trying to claim China is better, you're gravely mistaken. The fact is that they only nominally behave because the US is superior in both economic might and military power, and they know there will be serious consequences if they are more overtly aggressive.
"have been widely hailed by most of the world as beneficial for all"
Citation required, that's a bold claim.
I have made no claim to China being better than the US, and for the record I'm not excusing the UK either. What I am saying is the US belongs in the same boat as China as far as human rights violations is concerned.
The US these days represents the Roman Empire starting it's mighty fall, and it will take the rest of us with it. Not particularly happy about that prospect to be honest. The dark ages wasn't a pleasant period in human history, and yes I know the term refers to the lack of documentary evidence on what really went on during that time, but why do you think that was?
While pointing at trade wars and Trumps missteps is fun, I suspect that it downplays what was actually happening. If you look at the broader picture for Cisco, they are losing market share or experiencing prolonged slow downs in the majority of their traditional western markets and while there are some small highlights, it doesn't have any answers to the decline in Enterprise/Service Provider markets just yet.
China isn't dumping Cisco just because of the trade war - they are dumping Cisco (and other major IT/telecoms companies) because it can produce this stuff itself.
Resolving the trade war won't magically re-create this market unless Cisco and it's western brethren discover something China can't do - and it's just as likely that advances in these fields will come from China in the future.
Cisco, they are losing market share
Cisco is losing the market share because they are pricing themselves out of the market ... with shitty codes.
There are still some companies out there that are holding on to their 2960S/2960X, 3560X/3750X because it is stable.
If their current infrastructure is only doing plain layer 2, why bother going to 9K?
Current 16.X.X is like walking on a field of landmine. You move to a different version only to hit another bug one after another and but worst. And to add insult to injury, a lot of the bugs should've/could've been picked up if Cisco did some sort of testing. But they aren't (doing any testing).
Tell me again why Cisco shouldn't deserve losing market share?
Don't even get me started on their latest "cash cow": (Not-so) Smart Licensing
NOTE:
The company I work for have regular bi-monthly meetings with Cisco. We would tell them our gripe: Cisco code sucks because we are hitting bugs after bugs after bugs (here's the list of new TAC Cases we've raised). Cisco documentation is a joke.
Are they pretending to listen? Yes.
Are they taking notes? No.
Are they doing something about it? Not really.
This is no surprise re: Cisco, especially when you consider the Made In China 2025 plan of the Chinese government.
I expect this fate to fall upon other companies too - if it hasn't already yet.
Is it a threat to the rest of the world's trade / economies? Absolutely - for reasons mentioned by posters above.
Has it been historically a long time coming? Sure has - all that cheap manufacturing - the chickens have come home to roost.
And for all those bashing the US, please just stop - you remove any credibility you had (and no, you don't come off as funny either - just dumb).
If China wasn't Communist and prone to heavy handedness in its dealings with everything/everyone, this would not be a conversation / issue at all.
Well, China isn't communist -they have a government and private industry, a pretty good giveaway (you did read The Communist Manifesto, didn't you? It's not all jokes*.) and if you want heavy handed, take a look at your own country - someone has made a list above of the people who forgot to pay the Danegeld.
So by your own logic it isn't an issue at all.
*The bit about the State withering away when Communism comes is funny, but unintentionally so. Marx was a good writer and did a lot to promote the work of Engels, but you can't help noticing that he's the grandson of a rabbi, because his communism is the perfect future promised by the Prophets. The Bible is in large parts about the conflict between left wing (prophetic) Judaism and right wing (expansionist, military, city-based monarchic Judaism), and that conflict continues today.
The Communist Manifesto [...] It's not all jokes
Maybe not. But I had a real struggle to distinguish the sensible stuff from the batshit crazy. It seemed just more sensible to dismiss the whole as inhuman rather than filtering out some meaningful parts - those are covered by other philosophies out there. Obviously I read it with a mind that grew up a century and a half later, having seen how it had been implemented.
You are relying on your 100% hindsight. Just as with 100% hindsight we can see the roots of totalitarianism in Hegel.
I would also really like to know where the ideas of the Communist Manifesto were implemented. Though, if you've read Walden II (Skinner) you will know there were serious American academics that thought they were workable. Despite Skinner having tried to work with the military in WW2.
.......it seems China is the bigger Capitalist at the moment. And US is shrinking into a socialist style domain with too much control freakery and freedom loss. They are going the communist way, surely. Surveillance and spying of own citizens, movements monitored, Social media hacked and spied upon, backdoors everywhere, arrogance of border and immigration staff, racism, gun crime. Looks to me like a downward spiral.
The only thing China buys is commercial Aircrafts ( The biggest US exports for a while) and some agriculture produce, and of course, raw materials for its low cost manufacturing prowess.
WW3 when the Chinese decide to dump all the US treasury bonds . Gold prices will go ballistic and we will have quite a show.
At the moment China is accepting US Treasury bonds that it knows are likely to be worthless some time in the future. Their reason is to prop up the US until China is no longer dependent on the US or the rest of the West for any vital supplies. Sometime in the next 20 to 30 years China will decide that propping up the US is no longer required. Given my age (67) I probably will not be around to see it but expect an economic recession in the West that makes the Great Depression seem like a mild cold versus Ebola.
Neither socialism nor communism imply loss of freedom, and really the state of the US today cannot be attributed to left wing views. Especially as the Republican Party has been in real power for at least the last 18 years.
You need to educate yourself about the two political axes - left/right and libertarian/authoritarian are orthogonal. Both the US and China are somewhat authoritarian, but the US seems to be becoming more so as its empire starts to get restless.
when he tries to negotiate a trade deal with the USA after a no-deal Brexit ... the more weaknesses that the USA is seen to have then better for the UK.
He'll still have to agree to us having chlorinated chicken, most people will just eat it if it is 1p/pound cheaper. I'm worried about things like the NHS ...
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