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.

Asian Geographic - - FEATURES - BY ZIGOR AL­DAMA

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.


OP­PO­SITE PAGE One of the new 5G poles de­signed by Huawei in com­par­i­son with the 4G sys­tem. BE­LOW On 1 De­cem­ber 2018, Huawei CFO and daugh­ter of the com­pa­nys founder Meng Wanzhou was ar­rested in Canada as in­structed by the US as the com­pany has al­legedly vi­o­lated US trade sanc­tions.




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