In recent days and months, Donald Trump has been breathing fire and brimstone against China’s telecom and smartphone Goliath, Huawei.
On May 15, he passed an executive order virtually banning Huawei’s access to US telecommunication network software and equipment.
Earlier in January this year, the US hammered the company with 23 indictments related to theft of intellectual property and evasion of US sanctions against Iran.
US’ war against Huawei isn’t new. What is new is the aggression to push Huawei out of non-US markets as well. The US’ western allies have been under pressure to limit or ban Huawei’s 5G rollout and hardware.
Britain has come down on the company. British Telecom (BT) has announced it will eliminate all Huawei presence from its networks by 2021. Japan too has said it will stop buying Huawei and ZTE equipment. Germany’s Angela Merkel, on the other hand, has stood firm and made it clear there will be no ban on Huawei.
The US’ case: the company has a cozy relationship with the Chinese government and its telecom equipment is being used to spy on other countries and companies. This April, the CIA went so far as to accuse Huawei of being funded by Chinese state security.
In recent weeks, Trump’s anti-Huawei campaign has become shriller as it moves into a phase of an open trade war against China.
US AFRAID OF LOSING OUT
But is it security issues that are pissing off the US? Or is it more to do with the power and technology of Huawei, and the threat it poses to American companies like Apple? In a statement on March 21, Huawei mocked the US for having “a loser’s attitude” because its technology can’t compete.
Let’s look at some of the facts. Huawei today is the world’s No.1 telecom supplier and the No.2 smartphone manufacturer. It posted sales of $105 billion last year, more than IBM. It is a pioneer and leader in 5G wireless networking equipment. Despite bans, Huawei saw shipments of 59.1 million units, a 50 per cent growth in smartphone sales in the first quarter of calendar 2019. In comparison, Apple plummeted 30 per cent, while Samsung, the market leader, was down 8 per cent. Huawei’s target is to beat Samsung by 2020.
The success of Huawei has been its technological edge. A recent example is the Huawei P30 Pro smartphone. It literally reinvented the smartphone camera delivering a 5x periscope zoom and a super spectrum sensor that provides an unbelievable level of low-light performance. Result: In a tech face-off, the P30 Pro edged out Google’s mighty Pixel 3.
CHARGES OF SPYING
What are some of the security threats cited by the US administration? In 2012, a US House Intelligence Committee report found Huawei and fellow Chinese telecom company ZTE acted on behalf of the Chinese government, and the wireless networks they operated were possibly used for spying.
Another specific allegation is that Huawei worked for years to steal US telecom operator T-Mobile’s proprietary phone-testing technology, known as ‘Tappy’.
Cyber-snooping and companies teaming up with their governments to further the ends of realpolitik are a fact of international relations. Huawei and other Chinese companies may have tie-ups that the Trump administration claims. But is the US any better? Revelations by Edward Snowden, a former US defense contractor who leaked classified information on how the US and its allies were running numerous global surveillance programmes, showed that a programme called ‘Prism’ tapped directly into the servers of nine internet firms, with their consent. These include Facebook, Google, Microsoft and Yahoo.
Ultimately, the US ban on Huawei accessing parts and software in the US is about trade dominance. It is to slow up and squeeze Huawei out of the market and let companies like Apple and others gain from its loss. It is expected that in the short-term, the 5G rollout, which China is all set for, will be delayed as Huawei will find it difficult to access US sources for parts and software.
Beyond China, Huawei has signed dozens of commercial 5G contracts around the world, including 25 in Europe and 10 in the Middle East. These will all be struggling now. Possible beneficiaries will be Nokia and Ericsson; and in the 4G space, Samsung.
The irony is none of these Huawei competitors are American. The final spin-off is about new technology that benefits everybody slowing. Isn’t capitalism all about growth through competition? Can the US, acting as the world’s policeman, be allowed to turn the clock backwards?
Technological edge
The success of Huawei has been its technological edge. In Huawei P30 Pro smartphone, it literally reinvented the smartphone camera with a 5x periscope zoom and a super spectrum sensor that provides an unbelievable low-light performance. Result: In a tech face-off, the P30 Pro edged out Google’s mighty Pixel 3.