What US-China trade war reveals about the value of 5G today

Competition over 5G technology continues

KUWAIT CITY, April 9: Over recent months, we have seen new chapters in the trade dispute between the United States and China. Some analysts attribute the intensity of the conflict to the introduction of 5G technology, which is one of the key reasons why disputes continue between the two nations even after the two countries signed an initial ‘phase one’ trade agreement on Jan 15, 2020. The world has since become occupied with the COVID-19 pandemic, and the competition over 5G technology has thus continued, where Huawei did not hesitate to strengthen its efforts on deploying 5G networks across the world.

It is worth examining this issue not least because it will have a significant long-term impact on global economies - and indeed global health.

So let’s start from the beginning, in which a US National Security Council document disclosed the government’s concern over China developing 5G technology. This may have prompted the country to raise its efforts in enforcing obstacles for companies like Huawei, a Chinese-based global leader in 5G networks. The US government has since followed with claims that companies like Huawei represent a national security threat to the US because of alleged connections to the Chinese government.

Since those initial allegations, however, many have been shown to be unfounded as they lack hard evidence.

The US’s campaign to eliminate Huawei from competitive markets has mostly fallen flat. While there is certainly a global concern about the future of cybersecurity, it is not specific to one country or one company. As a result, Huawei has recently been approved to continue supplying 5G technologies in markets such as the UK and the European Union.

One of the countries that had initially banned Huawei 5G kit is Australia. However, Australian cybersecurity expert Henry Wolfe notes that the ban was made under the pretext of protecting national security, despite no evidence that Huawei gear is insecure. He believes that Australian citizens will be “paying for that decision for decades to come” as the country is not able to accelerate as quickly or efficiently into a digital future.

What this conflict actually brings to light is the great value of 5G technology to national development. The value is so great that it has led countries to challenge pressure from the United States, and to make their own decisions with regards to 5G security policy.

The conflict also brings to light the reminder that the United States has traditionally played a leading role in technology innovation, but has been unable to lead in developing 5G technology. It was Chinese companies like Huawei who led this charge. According to a report by the Science and Technology Daily, which is published by China’s Ministry of Science and Technology, Chinese government ministries and research institutes have even met to discuss a national 6G technology research and development group - looking well into the future.

It seems that the current US administration is aware that they have missed the train already, hence intensifying its trade war with China and escalating the 5G issue with its allies in an attempt to gain back some control. Last February, US President Donald Trump actually tweeted that he wants 5G and 6G technology in the country “as soon as possible”, and that “American companies must step up their efforts, or get left behind.”

However, leading in technology requires heavy preparations. In Huawei’s case, the company re-invests 10% to 15% of its revenue in R&D each year. The company has spent more than $70 billion on R&D in the past decade, which has resulted in more than 80,000 patents worldwide – including over 10,000 patents in the US alone.

The United States’ fear of China technology leadership may be legitimate from a reputation standpoint,but it doesn’t have to negatively affect the country’s - or the world’s - future. There are legitimate tools and methods to compete in technology far away from politics. This is all the more important considering the spread of COVID-19 and the slowdown in global manufacturing and economic growth.

Freedom of trade must be preserved so that technology canbe beneficial to all, and provide solutions to humankind in a healthy and competitive environment.