At­tack on Huawei Will Mo­bilise China

Bei­jing might play it cool, but not the peo­ple

The Economic Times - - Breaking Ideas -

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.

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