Being someone who has a reasonably good grasp of technology, I found it very strange that Huawei is banned from selling 5G networking technology into the US market. The official line from the US government was “China could have back doors into these systems which would create a national security risk” – that’s a great way of scaring people in the general population, but it did not make sense to me from a technical standpoint.
In practice, its quite challenging to sneak stuff like that into a system and hide it away, or to look at it another way, it’s quite easy for the buyers of the equipment to apply more diligence in its inspection and security assessments to avoid such a risk. So I have always had my suspicions about the real reason.
So turning the cynical part of my brain on, I start to think about the world stage for big Chinese tech companies, because they are beginning to gain ground globally, or at least are getting big enough to challenge the USA supremacy in the tech business. The USA is accustomed to being the only home of tech giants. But with the rise of companies like Huawei, Alibaba, and a few other rising stars, it is probably reasonable to think that the US might be getting a bit concerned about their global market stronghold. One aspect of the US economic domination comes from its ability to stay ahead of the game in tech, with the glitz and glamour of the Silicon Valley showboat (the Hollywood of the tech industry) being the shining source of all innovation in tech – at least that is what the marketing suggests.
Anyway, I read today that Donald Trump suggested in recent talks with China that Huawei 5G issues could be part of a deal concerning the escalating US-China trade talks! And this comes after the US declares a severe national security risk if Huawei is allowed to sell their technology for use in 5G networks and strongly encouraged its allies to follow suit and not use their equipment.
So what happened to the security risks then?
If you think about it, had Donald Trump instead said, don’t by Hauwai 5G networking tech because Hauwai are getting too big, and they have essential patents on some 5G technologies which means they will get a bigger slice of the pie from the global 5G roll-out, and we don’t like the fact that Hauwai is not an American company. With that positioning, I don’t think Donald Trump would have gained the support, either domestic or internationally, so it seems the threat of national security is a useful device to gain popular political support for something that would otherwise look somewhat underhanded.
I am generally in agreement with the idea that the US (and other countries) should fight for their rights and position in the global market; there is nothing instinctively wrong with that, and after all, I thought we are all aspiring to be in a free and fair global market. But there seems to be something sinister about misleading the world stage in the pursuit of this agenda and using your power and influence to force other countries to follow suit.
Now in the midst of this, you now have the likes of Google crippling the Android OS capabilities on Hauwai mobile phones. Is this an opportunity for Google to enhance the market opportunity for its range of new Pixel smartphones using the (eh-hem security threat) DT directive! There is that cynicism again! It is a dangerous game to be playing, and I would not under-estimate China’s ability to go-it-alone if they wanted to. There is an unhealthy belief in the US psyche that China needs US tech – I am not sure that’s true, but I am pretty sure that western tech needs China’s manufacturing capabilities and economic labor force.
The quality of tech coming out of China has been steadily getting better, and I am sure China is more than capable of building its own tech, every bit as good as what’s available already if commercial companies are supported/encouraged by a highly motivated government who have a political point to make.
I don’t fully understand the politics or culture in China, but one thing is for sure, over the last 50 or so years, the West has benefitted hugely from the low labor and manufacturing costs in China, huge companies like Apple have flourished because of this very enabling economic model. But as a result of this western consumption, there has been a lot of wealth created that has been flowing towards the far east, because we cannot get enough of the bargain basement stuff that we all love to have.
China is is a closed shop, it seems both complicated and prohibitive for the West to do business in China, easily at least, in the way we are used to at home, so it does feel like very one-way traffic, but you can’t help thinking that we must have anticipated this time would come. I do believe it is a good thing that China is challenged on this point, but I am not sure an outright and aggressively instigated trade war is the best way to go about this, trade should always be mutually beneficial.
Having a challenger to the US dominance in the tech area is a good thing as far as I am concerned, competition is essential, and I expect that the US could quickly lose its stronghold in this area. A country with the size and economic scale that China has, who is willing to make the big bets on rising global tech companies will create competition that to date, the US has thus far enjoyed almost worldwide exclusivity.
It will be interesting to see how the US-China trade war plays out; I expect this will start to dominate the headlines and will have an impactful effect on a lot of people globally. But the new headlines seem a welcome change, giving us in the UK at least, a much-needed distraction from Brexit!