Attack on Huawei Will Mobilise China
Beijing might play it cool, but not the people
Meng Wanzhou is the chief financial officer of China’s most important technology company, Huawei, and the founder’s daughter, besides. Her arrest in Canada for extradition to the US is a remarkable development that will test the calibre of diplomats on either side as the US and China negotiate a truce over their trade war. Initial fears that China would retaliate by arresting American or Canadian executives or imposing sanctions on US companies would appear to be misplaced. The top item thrown up by a search for Huawei on Chinese news agency Xinhua is a link to Huawei technology converting the dazzling Northern Lights into music, with brief, sober news of the Chinese government registering protest over Meng’s arrest and demanding her immediate release appearing next. The Chinese are refusing to be provoked into derailing the trade talks.
However, whatever the immediate fallout, China is likely to take the hostile move against their flagship technology company very seriously. Huawei is not like other phone companies that sell their fancy gadgets around the world. It spends1620% of its revenues on R&D, has a presence in China’s quantum communications efforts and has significant capacity in artificial intelligence. It produces its own chips and chipsets for its handsets, besides making the basic switches, routers and other gear that make up telecom networks. It is the second-largest vendor of 4G gear in the world, behind Nokia. However, this national champion is viewed as an extension of the Chinese state by western governments, and has recently been barred from their 5G infrastructure by Australia and New Zealand. The Chinese people are likely to consider the assault on Huawei an affront to their national aspirations for technological excellence. Even fancied US products could face consumer resistance.
Ideally, Huawei would not just defend itself against the charge of violating Iran sanctions, but also demonstrate the absence of spyware in its network deployments. Sure, Huawei is in a bad spot. But it is in an enviable position, from the perspective of Indian industry.