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Economy

Huawei Hysteria: Is China America’s New Ideological Adversary of the East?

Jun 04 , 2019
  • Leonardo Dinic

    NYU Alumnus with a Master’s Degree in International Relations

Cyber espionage and surveillance play a crucial role in the US depiction of China as an adversarial encroacher of global markets through its firms like Huawei. In Europe, Washington considers Huawei a threat to NATO and Trans-Atlantic cooperation. The integration of Huawei hardware in 5G networks could risk the loss of sensitive information exchanged between NATO allies. Washington argues that, with Huawei equipment installed throughout Europe, Beijing could coordinate with the firm to collect sensitive information damaging to US national security. In the context of the China-US trade war, the Trump administration treats Huawei as an extension of the Chinese state to leverage US positions in negotiations. 

However, the fundamental issues surrounding disagreements in both Europe and the China-US trade relationship derive, at least in part, from a conceptual divergence on privacy. Western advocates for human rights criticize Beijing’s increased surveillance and control of the Uighur population in Xinjiang. American journalists document China’s export of partially Huawei-developed surveillance systems to other illiberal governments. ‘The perfecting of digital espionage’ via Huawei-led systems concerns vocal advocates for worldwide liberal democracy. Supporters of the US-led global system argue that China normalizes government intrusion through ‘Big Brother’ proclivities. In the current trade war, the protection of US technologies from Chinese firms provides yet another example of disagreement on topics ranging from cyber surveillance to intellectual property theft.  In the US, freedom from government intrusion is foundational to cultural and legal traditions and Huawei, at least for Washington, is somewhat of a signifier for ‘un-American’ positions on privacy. 

While Americans unenthusiastically accepted legislation like the Patriot Act and voluntarily granted personal information to US tech companies, Democrats and Republicans in Washington both share concerns about prospective vulnerabilities to foreign powers or their state-influenced firms. Chinese intellectual property theft, mass surveillance, and human rights concerns are a bipartisan issue in Washington. A 2013 report issued by the Commission on the Theft of American Intellectual Property stated that China engages in 50 to 80 percent of all international IP theft. 

Over the past months, Huawei dominated news concerning Chinese and US geopolitical rivalry in the context of revolutionary technologies and America’s alliances in Central and Eastern Europe. Amid escalating trade war, the Trump administration issued an executive order to declare a “national economic emergency” and ban the sale and transfer of technologies and services to “foreign adversaries” who pose risks to national security. While the order does not name Huawei, it prohibits the use of Huawei equipment in US networks and requires Washington’s approval for future foreign purchases of US technology. 

Shortly after, Google announced that it would comply with the ban, which prevents new Huawei devices from offering software services and applications like Gmail, YouTube, and Google Maps. Google will only allow the most basic version of the Android operating system on new Huawei phones with limited licensing agreements for software. The ban also prohibits hardware providers like Qualcomm, Broadcom, and Intel from selling equipment to Huawei. Last year, China imported more than $300 billion in computer chips. The PRC’s dependence on external hardware is problematic, and the Trump administration believes pressure on Huawei, which may hurt US consumers in the short-term, will create lasting US advantages in trade negotiations.   

In response, Chinese authorities pledged tens of billions of dollars to assist homegrown chips producers. After the initial ban, US officials agreed to a 90-day exception to the restrictions. While a similar prohibition targeted Chinese telecom company ZTE last year, Huawei is the largest business subjected to such regulation. In May, tariffs on $200 billion of Chinese imports increased from 10 percent to 25 percent. China plans to raise levies on $60 billion of US imports beginning June 1. A letter signed by 173 companies, including Nike and Adidas, warned that the 25% tariffs would hurt the working class in the US and threaten business in China. President Trump responded by urging US firms to relocate production back to the US. 

Kevin Wolf, former assistant secretary of commerce for export management during the Obama administration, recently emphasized Huawei’s global significance. “Huawei affiliates all over the planet depends on U.S. content to function and if they cannot get the widget or the part of the software update to keep functioning then those systems go down,” Wolf said. According to Huawei, it supplies 45 of the world’s top 50 phone companies. However, only 2 percent of telecommunications equipment purchased by North American carriers was Huawei-made in 2017. The ban hurts rural areas in the US most because they are used to purchasing Huawei hardware for its impressive tech but lower price points. 

Also, China represents a massive profit source for Apple, Boeing, General Motors, Starbucks, and other major US corporations. Chairman Ajit Pai of the Federal Communications Commission supported President Trump’s move and labeled it an effort at “securing America’s networks.”  Adam Segal, cybersecurity director at the Council on Foreign Relations, stated that Washington’s step against Huawei further supports previous positions in Europe, where the US advised allies to reject Huawei equipment. However, Huawei argued that the ban “will not make the US more secure or stronger.” Instead, the decision to punish Huawei would limit both companies and consumers to “inferior yet more expensive alternatives.” 

President Trump’s tough stances on trade and Chinese tech is nationalizing the conflict. For China, Huawei’s success represents a rising nation unfairly attacked by a declining US empire. In response to the Huawei ban, Chinese social media users rallied behind the firm and presented Trump as a bully bent on forcing US control. Other users pledged to switch from Apple to Huawei devices, and posts on Weibo, a Chinese social media website, contained a hashtag, which translates as “Huawei chips do not need to rely on US supply chains.” The hashtag had nearly 50 million views. 

For some in Washington, Huawei now represents a surveillance arm of the Chinese Communist Party. To curb international suspicion, Huawei recently opened up a few facilities to foreign media outlets. Huawei employs 180,000 people worldwide, and nearly a third of its employees work near Shenzhen, also known as China’s Silicon Valley. 

Recently, President Donald Trump openly told reporters that the Huawei ban is leverage in trade negotiations. In an interview with Bloomberg Television Huawei Technologies Co. founder, Ren Zhengfei, further emphasized the geopolitical nature and Huawei’s ‘existential threat.’ He firmly stated, “the U.S. has never bought products from us.” “Even if the U.S. wants to buy our products in the future, I may not sell to them. There is no need for negotiation.” 

Regardless of the political outcome, US pressure on Huawei will damage its lead over competitors like Ericsson AB and Nokia Ovi. Without software and hardware components from Google, Microsoft, and chip-designers like ARM, Huawei will face difficulties as it attempts to surpass Samsung as the world’s largest phone brand. The South China Morning Post labeled the conflict a new ‘Tech Cold War’ which might force China to contemplate a ‘digital iron curtain.’ 

The Huawei conflict confirms that data and technology will settle the struggles for supremacy between China and the US in the 21st century. However, Huawei’s perceived relationship with the Chinese Communist Party, its positions on privacy, and the CCP’s overall views on government surveillance will complicate cooperation between the two powers. Through a sort of Huawei hysteria, China just might become America’s primary ideological adversary of the East.

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