Huawei’s rise to dominance plays into the technology war between China and the US. The Chinese telecommunications firm is one of the most successful technology companies in the world. It makes nearly US$10 billion in profit every month and has overtaken Apple in the sale of mobile handsets.
But with success comes a backlash – especially from the US.
Last year, Huawei’s chief financial officer Meng Wanzhou was arrested and detained in Canada at the request of the US. And there are alarming warnings from the US Central Intelligence Agency that Huawei is financed by Chinese state security and involved in international espionage. The company has insisted the concerns are unfounded.
So is Huawei simply a victim of American jealousy or is it a genuine threat to global security?
Here, three experts in Asia, Europe and the United States offer their views.
Huawei will become stronger, better and safer
‘The China-US relationship can never be too good or too bad.” So believed Deng Xiaoping, the chief architect of modern China. However, as China’s influence increases, its relationship with the US deteriorates. China and the US are engaged in a new Cold War when it comes to trade, with technology the central background.
The situation is reminiscent of the Cold War between the US and the USSR in the middle of the 20th century, when they engaged in a space race to compete in technology.
The rivalry between the US and China centers on fifth-generation (5G) mobile telecommunications technology, which is much faster, safer and more reliable than current 4G networks. It is a huge and growing market and is projected to grow rapidly until 2025, when it could be worth around US$33 billion.
In 2018, Huawei had a 22% share of the world’s telecom-equipment market and almost half of the 5G market. The company is also the leader in research and development into 5G.
To hinder or even destroy Huawei, the US government has recently launched a series of deliberately planned campaigns, which will likely fail, as its accusations are based on false, unproven and untested propositions. The US Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products.
Ironically, the fear in the United States over Huawei has inadvertently shown the world how advanced the company’s technologies are. Paradoxically, the attacks are only encouraging the company to become stronger, better and safer.
The US might think that the arrest of Meng Wanzhou – CFO of Huawei and daughter of the company founder Ren Zhengfei – would be catastrophic. In reality, it has had only a limited impact on the company, which relies on comprehensive systems rather than on a single employee.
Meng’s arrest has also boosted morale among Huawei’s 180,000 employees and they are now more united and motivated.
The US has urged its allies to boycott Huawei 5G equipment. But even if the US and its Five Eyes intelligence network allies (the UK, Australia, Canada and New Zealand) collectively reject Huawei, the company can still survive as its markets cover around 170 countries. Huawei has a 38% revenue market share in the Asia-Pacific region, a 30% share in Europe but only a 2% share in North America.
Moreover, if Huawei can develop better technologies and products, its goods will be much in demand. The recent launch of the impressive Huawei Mate X folding phone shows the company’s commitment to cutting-edge technology.
We also challenge the view that Huawei is a security threat. According to its global cybersecurity and privacy officer, Huawei is the most open, transparent and scrutinized company in the world, setting a high standard its rivals cannot match.
People may not be fully convinced by Huawei’s own claims but it is easy to foresee that in the future, it will be nearly impossible for Huawei to be owned, controlled, or influenced by the Chinese government. Therefore, the company will have to uphold the strictest safety and privacy standards for its 5G equipment.
The 5G era is upon us and if we just let all market players compete freely and fairly, the entire world will benefit. The United States is always proud of being the world’s premier free market economy but it is now suppressing open competition.
Even if the US government insists on banning Huawei in order to service its own political and national interests, other countries, especially many developing ones, shall make wise choices. If Huawei can offer more cost-efficient and technologically advanced 5G networks, why not welcome it?
US right to be concerned about Huawei’s global aspirations
By Sam Kessler
The US blocking of Huawei comes as serious grievances affect the US-China relationship. One might assume that the Trump administration’s protectionist policies have been a sudden and abrupt action that could jeopardize long-term economic and trade dynamics between the two nations. However, there is actually a very solid reason why the two nations are currently engaged in a massive trade dispute as well as the continual US blocking of Huawei.
Suspicion and distrust
Policymakers and business leaders have long complained about China’s widespread intellectual property theft, espionage, cyber and data intrusion, and the unfair trade practices that have been committed by the Chinese government and its corporate affiliates.
China’s political system and its ideology are significantly different from those of the US and its allies. There is understandable alarm at China’s expansionist policies, expressed through the Belt and Road Initiative. And China retains the rhetoric of conflict through its ‘Three Warfares” doctrine – warfare through public opinion via the media, or through psychological or legal means.
Previous US National Security Strategies placed little emphasis on China. However, since 2017, the Asian dragon has been identified as a threat in terms of cyber security, data incursions, intellectual property theft and espionage.
The possible global domination of Huawei in the 5G sector would be a game changer for Chinese foreign policy as it would affect the balance of power for at least the next half of the 21st century.
The blocking of Huawei’s technology has been crucial in helping protect US cyber infrastructure because its devices and microchips have been known to contain data security vulnerabilities. If allowed, the potential for spying as well as data and intelligence theft would increase. This is why the government and military have decided to eliminate all Huawei technology from their systems. The semiconductor industry shares these concerns, as a majority of the world’s microchips are built in China.
Internet of Things
Furthermore, as Internet of Things (IoT) technology continues to grow, this could escalate as another area of security concern to the United States and its allies.
Huawei heavily competes with such US companies such as Apple, Cisco and Qualcomm with regard to devices, network infrastructure and microchips.
Yet these companies are ahead in terms of quality, innovation and network security, so it may be too early to assume a Huawei victory in the 5G arena just yet. In the end, the battle between the US and China will be fought through technology.
national security and intelligence analysis
This article was originally compiled and published by Asian Affairs magazine.