Huawei debacle looms at US-China talks
Trade negotiators from the US and China will hold a video conference this week as part of negotiating phase two of the January trade deal between the two countries. Like so many such pacts, this process has been disrupted by the coronavirus pandemic.
However, looming large over the talks — though it will not be on the agenda — will be the US campaign to strangle the global growth of Chinese tech giant Huawei, and most recently the forced sale of Chinese app TikTok.
After months of vilifying Huawei, US President Donald Trump has succeeded in dividing the West’s approach towards the Chinese company.
The UK has changed its stance and is now limiting Huawei’s role in supplying equipment critical to its 5G infrastructure. A month ago, former BP CEO John Browne stepped down from his position as chair of Huawei UK, a role that was intended to help the Chinese company to penetrate the British market.
The rest of continental Europe, which has been aggressively lobbied and threatened by the Trump administration, is nervously considering its options.
After being defused by a truce in January 2019, the trade war over the long-running trade deficit endured by the US is back with a bang. Trump’s main gripe with Huawei is that the company’s technology is being used as a spying device on Beijing’s behalf. As is often the case with Trump, no proof has been provided to back up this allegation, which could as easily be levelled against US companies.
The next phase of the battle to contain and hobble Huawei is expected to be strong-arming the developing world, including Africa, to stop embracing the mobile company. Before answering the question of what posture the developing world — including SA — should adopt, it ’ s worth considering how Huawei caught Trump’s eye.
As eloquently argued by Trump’s former national security adviser, John Bolton, in his memoir The Room Where It Happened, every decision by Trump’s White House is about his re-election calculus. The trade war with China fitted neatly into the “America first” narrative, which got Trump elected to the White House. For months, it served his purpose of having Beijing as the bogeyman for the loss of American jobs and the diminishing US standing in the world.
When China relented and agreed to buy more American goods, Trump gloated that this was a victory for his strategy to get a better deal for the US from the world’s second-largest economy. At the World Trade Organisation, which has been weakened severely by Washington’s foreign policy, Trump and his allies have sought to have China classified a developed country, while Beijing prefers to be considered a developing country.
The January trade detente was cut short by the outbreak of the coronavirus pandemic. Lockdowns battered demand across the world, including China. Even though China contained the virus’s spread, enabling its economy to rebound, this recovery has been insufficient to achieve the goals of the January deal.
Trump initially applauded Beijing’s handling of the virus. But when the US began feeling the fallout, thanks to its slow response, he changed his stance, and accused China of underestimating the pandemic and concealing its extent. With trade now used as a weapon to club China, Trump seized on two issues: first, scapegoating China for Covid-19; and second, imposing restrictions on Huawei, the latest proxy for his war against China.
On the first, he has started the process of withdrawing the US from the World Health Organisation (WHO), which he accuses of colluding with Beijing in hiding information about the virus. In the now unlikely event that Trump is reelected in November, the US will leave the WHO in 2021. Also, an independent inquiry is under way to look into the WHO’s response to the pandemic.
Like many technology companies, Huawei has not been affected badly by the pandemic. Its global growth is a source of insult to Trump, which needs to be addressed by cutting off its legs through restrictions and lobbying allies to follow suit. But dealing with a private company such as Huawei is far more complicated than, say, a trade war, which is a government-to-government issue. This explains in part why action against the company has been clumsy. It also explains the lack of a coherent strategy.
As the November US election approaches, pressure is likely to be brought on the developing world to ditch Huawei. This should be resisted by Africa and the developing world.
Huawei is a victim of its own success. Like China, it has been too diffident about its ambition, fuelling suspicions about its intentions. It has done very little, if anything, to explain its rise. Apart from denying the spying allegation, it has done nothing to address suspicions about the use of its technology.
To weather this storm and become a credible global player, it will have to change its approach of letting its work speak for itself. It will have to explain its technology as a force for good. Otherwise, Trump will continue to drive the toxic narrative around it.
APART FROM DENYING THE SPYING ALLEGATION, IT HAS DONE NOTHING TO ADDRESS SUSPICIONS ABOUT THE USE OF ITS TECHNOLOGY