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Trade war

US and China enter digital arms race after ZTE spat

Washington eyes Huawei next while Beijing rushes to be self-sufficient

Facial recognition software is advertised at the Global Mobile Internet Conference in Beijing in April. The ZTE saga has hardened China's resolve to develop its own technology.   © Reuters

BEIJING/WASHINGTON -- The U.S. government's recent deal to lift sanctions on Chinese mobile device maker ZTE has settled a high-profile trade dispute but also suggests the beginning of a new digital cold war between the world's two largest economies.

In Washington, the Trump administration has gained new confidence in the power of sanctions and is turning its eye to more Chinese companies it can target. In Beijing, President Xi Jinping is pressing the need to become self-sufficient in high-tech parts so as to avoid similar headaches in the future. 

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