The Upcoming Tech World War
China and the US are fighting for hegemony in a new world order. Huawei and the deployment of its 5G networks, meant to open a new era, are at the centre of the tech worlds hottest diplomatic and trade dispute.
China and the US are fighting for hegemony in a new world order. Huawei and the deployment of its 5G networks, meant to open a new era, are at the centre of the hottest diplomatic and trade dispute.
The case of Huawei is one of the manifestations of the United States using its power to push China back. Pascal Lamy, former World Trade Organisation (WTO) Director General (2005-2013), doesnt sweeten words when asked about last Decembers arrest of Huawei Vice President Meng Wanzhou in Canada at the request of the US. It reflects the rivalry between the two countries. Technology is the new front of competition, because we all know that a large part of future growth will come from innovation and research. But we can compete trying to reach a win-win game or we can do what Donald Trump is doing, which is trying to damage China.
Since Mengs arrest, Huawei has been at the centre of the harshest diplomatic and trade row between the worlds two most powerful nations. The US believes the Chinese executive is the mastermind of an elaborate fraud designed to dodge sanctions imposed on Iran. According to US regulations, no American technology can be sold to the few countries on Washingtons black list, but a federal court accused Meng of creating an intricate web of ghost companies to do business with Iran.
Whether true or not, Lamy believes these sanctions are wrong to begin with: The United States, because of its supremacy, can afford to have a system of extraterritorial sanctions applying to a number of countries, including Iran and Russia, among others. We Europeans know well how it works because we are also hit by these sanctions. We think this is not in conformity with international law, but nobody has been able to change this system, which I believe is odd and wrong. Now it just happens that its a high executive of Huawei, a huge tech and telecom giant from China, the one suffering from this.
However, thats just one of the
23 charges laid against the worlds largest telecommunications equipment manufacturer. Because the American court also intends to try Huawei for bank fraud, theft of intellectual property, and even endangering national security. At the heart of the dispute is the deployment of the upcoming 5G networks, a technology in which Huawei has invested heavily. The US has banned the Chinese company from its soil and warned allies that the Chinese government could request the company to open back doors in the system and thus facilitate its espionage operations.
US Secretary of State Mike Pompeo went a step further in February and threatened to take actions against members of NATO if they choose to adopt Huaweis technology. If a country puts it in some of their critical information systems, we wont be able to share information with them; we wont be able to work alongside them, he said during a televised interview. We cant forget these systems were designed alongside the Chinese military. They are creating a real risk for our allies and their systems, and the security of their people, added Pompeo.
In another shocking move, Poland arrested a Huawei employee, Wang Weijing, and charged him with espionage in January. Concerned about all these revelations, countries like Japan and Australia have decided to ban the Chinese company altogether and others will watch closely as Huawei deploys its new technology, especially in Europe. But so far, no proof to back US claims has been made public, and that has fuelled Chinese official medias criticism.
Its time to prove how Huawei serves as a security threat, wrote the Global Times. What [US Vice President Mike Pence] said is try to lobby European countries to follow suit by barring Huawei from their 5G network development, which is another step in the US-led geopolitical campaign against Chinas technological rise, the newspaper added in an editorial article. Across the Pacific, a poll by CNN also found that 60 percent of Americans surveyed believe there are political reasons
Whether true or not, Lamy believes these sanctions are wrong to begin with: The United States, because of its supremacy, can afford to have a system of extraterritorial sanctions applying to a number of countries...
behind US Huawei ban. Only 24 percent cited security as the main trigger of the conflict.
Chinas Foreign Ministry spokesman Geng Shuang raised the stakes when he blasted Washingtons attitude for being hypocritical, immoral and unfair bullying. Huawei, on the other hand, has kept a lower profile, but it has repeatedly denied all allegations. Reclusive founder and chairman Ren Zhengfei, Mengs father, even came forward and in rare interviews he reiterated that Huawei doesnt build back doors nor spies for China.
At a meeting with the foreign press, an event ASIAN Geographic attended, executive director Yu Chengdong insisted Huawei abides by all the laws and regulations and has never received a request for confidential information by the Chinese government. Even if Beijing requested such information, Yu added, Huawei would never do anything against its users.
But Yu acknowledged that the US ban and the current suspicion will have an impact: Carriers love our products and we will continue doing business all over the world. Weve been expelled from the United States for political reasons. Some politicians make a lot of noise and propagate rumours and fake news. In the short term, that will weigh us down. But we are doing the right thing and will continue growing. I may not sound very humble, but Im truly convinced that, even without the US, we will become world leaders this year. In 2020 at the latest.
Yu is definitely determined to fight back. The thing we know for sure, because Edward Snowden disclosed it, is that the National Security Agency (NSA) of the United States spied on people like German chancellor Angela Merkel. And our devices were the only ones hackers couldnt crack at a recent competition. If Donald Trump is worried about privacy, I suggest [he chooses]Huawei, Yu said with a smirk.
The US often points an accusing finger at Ren Zhengfei for being a member of the Chinese military and cites the fact that he is still a member of the Communist Party. But Yu says the company has no ideology: Our products have nothing to do with politics. Although we are a Chinese company, we operate in 170 countries and regions and have R&D facilities across the globe, defends Yu.
The Huawei case has become a bargaining chip for the US in its trade war against China. President Trump has accused China of stealing industrial secrets to advance its technology and he has admitted that Mengs release could be used in the negotiations with Beijing. In a way, Lamy considers Huaweis vice president a hostage of a much wider dispute in which the West demands China to further open up its market and reform its economic system: If you compare the rhythm of Chinas opening up reforms today to what it was when it joined the WTO [in 2001], it has certainly slowed down, says Lamy. Although the official discourse remains committed to it, for the moment we see more talk than walk among Chinese leaders. And, particularly with president Xi Jinping, the country has moved towards more centralisation.
Lamy believes the West should work together to put pressure on China, but not on Huawei: We have to keep pushing China to keep shrinking its state-owned enterprise sector, which is too big now for an economy of its size and level of development. [But Huawei is a cooperative owned by employees.] Its not sustainable that China keeps more than one third of its economy under state command. Thats why the investment treaty negotiated in the EU to treat Chinese investments reciprocally is the way to go.
Lamy is very critical of President Trumps handling of relations with China: Trump
5G will bring a whole new world of possibilities. Because it will allow devices to communicate with one another, and the low latency will boost technologies like autonomous vehicles or remote controlled surgery.
has broken away [from] the policy of containing China and trying to bring it to the international system, in place since [former US Secretary of State Henry Kissinger]. Trump has taken a very different stand. A much more aggressive one. And I believe this is wrong and dangerous, because it reinforces part of the Chinese system which is more nationalistic and inward looking. More Middle Kingdom-like. And a more aggressive USA can create a more aggressive China in a chain reaction that would be bad for all.
With Huawei, the main point of friction is 5G. The reason is that this technology is not just another speeding up of Internet connections. We are about to enter a new era, Yu says. 5G will bring a whole new world of possibilities. Because it will allow devices to communicate with one another, and the low latency will boost technologies like autonomous vehicles or remote controlled surgery.
Huawei has been a pioneer in the field. Weve been investing in 5G since 2008, and we are now the only manufacturer who can provide everything required to set up and enjoy the new networks. In the coming five years, we will invest up to 100 billion US dollars in R&D to improve capabilities, the company said in a written reply to ASIAN Geographics follow-up questions. We expect the world to have 10 billion connected devices by 2025. This, for example, will finally make smart homes a reality, adds Yu before showing a video of how a surgeon was able to successfully operate on the liver of an animal lying 50 kilometres away thanks to a 5G connection.
Driverless vehicles will also become more ubiquitous thanks to 5G networks. Because this technology will allow cars to communicate among [one another] and also with the infrastructure. This will make autonomous driving safer and more precise, says Yu. But for Huaweis executive director the biggest advantage will be enjoyed by those in hazardous jobs. Combined with virtual and augmented reality, the use of robots will be greatly expanded and lives will be saved. Im thinking, for example, about those who died working in the Fukushima nuclear plant after the 2011 tsunami tore it apart. With 5G, they will be able to operate remotely and without endangering their lives, emphasises Yu.
The new generation of networks, in combination with artificial intelligence, will boost cloud computing too. Simultaneous automatic translation will become a reality. You can talk to me in any language and I will hear it immediately in Chinese. Also, users wont require a huge amount of computing in their devices to run complex programmes because that will be done in the cloud, explains Yu.
After decades of lagging behind the West, now China wants to lead the world in the development of all these possibilities. This may be scary for the West, argues Chiang Jeongwen, a professor at the China Europe International Business School. The Chinese are avid early technology adopters, which opens many business opportunities for tech companies and gives a huge incentive to move forward. Now the country has the manufacturing prowess and also the innovation capability, so the Western dominance is in danger.
Asian countries will be the first to deploy 5G networks. China will lead the pack because it has heavily invested in the technology and the three main telecommunications carriers [all state owned] are betting big on 5G. But the West will eventually join the race too, says Yu. Despite being at the centre of 21st centurys biggest tech war, he shrugs US threats off and believes both Huawei and China will march on to take the place they deserve. And thats no less than the top position. ag
Zigor Aldama is the Far East Asia correspondent for Vocento, Spain's largest media group. His work often revolves around social and cultural issues.