Deeper mistrust than trade disputes

THERE’S an aspect to China’s rise as an economic power that presents a constant national security threat to the United States: the unlimited reach of the Chinese Government. Some Chinese companies are owned directly by the Government, and all owe a level of fealty to the Government.

A spectacular legal confrontation is now brewing between China and the US over Huawei, China’s telecom giant. The pressure point runs much deeper than whatever USoriginated equipment Huawei may have sold to Iran. The firm is on the cutting edge, developing and selling 5G (fifth generation) mobile phone service technology around the world. All fine — global competition is welcome. Except almost everything related to telecommunications technology has potential military usefulness, including for espionage.

Huawei says it is a privately owned company that does not answer to the Government, does not engage in espionage and complies with all applicable law. But who really calls the shots at Huawei?

The arrest may complicate the Trump Administration’s trade negotiations with China, given that Chinese authorities are angry about the treatment of such a highprofile executive. But this collision of interests will turn out to be a good test of Chinese intentions. Trade is one facet of a complex relationship. Both sides will be better off if President Donald Trump can negotiate a deal with Chinese President Xi Jinping without getting distracted by a criminal case.

As for companies like Huawei, the Chinese Government has a choice. It can encourage companies in sensitive industries to open themselves to outside scrutiny and investment. It also can they respect the law — US sanctions against Iran included. Or China can allow companies like Huawei to stay in the shadows, untrusted by the United States and other Western governments. There are plenty of other telecom companies willing to sell sensitive equipment and play by the rules.