The Cheat Sheet. Huawei, techno-nationalism, and the geopolitics of 5G

Yes, but they’re no bigger than the stakes involved in the competition to roll out 5G services.

Because in terms of technology, it does represent a quantum leap from 2G, 3G and even 4G networks. As good as 4G is, the network architecture is constrained by limits — on the number of devices and on high-speed data services, for instance.

But 5G has been designed to break free of all the shackles, with an eye on high-speed data transfers at enormous scale for applications of the future: machine-to-machine communication, which could see billions of devices ‘talking’ among themselves as part of the Internet of Things (IoT). It is also the engine, so to speak, that will ‘drive’ driverless cars and make the applications that power up tomorrow’s Smart Cities commercially viable.

Well, overnight, the Federal Communications Commission, the independent regulatory agency that oversees telecom services in the US, classified Chinese telecom giants Huawei and ZTE as “national security threats”, which could inhibit their expansion in the US market and their 5G plans there.

Sort of, although the stakes involved in 5G are vastly higher.

There’s intense competition between Chinese telecom companies, primarily Huawei and ZTE, and companies in the US and Europe. That competition, in which the Chinese giants have a first-mover advantage and the merit of lower cost, has lately taken an ideological edge. Some of it is rooted in Huawei’s and ZTE’s inability to erase perceptions that they work alongside the Chinese state and military apparatus. Under Chinese law, Chinese companies have perforce to “cooperate” with their government in advancing Chinese national interests, even to the extent of participating in intelligence activities.

That’s a term invoked by the authors of a paper for the US-China Economic and Security Review Commission. They noted that China leverages the openness of market-based economies to access advanced research and data, recruits globally talented workforce, acquires and invests in leading-edge firms through Chinese state financing, and freely sell their products and services abroad.

More than a tech war — and the gloves are off. To coerce Canada to persuade its courts to free Meng Wangzhou, Huawei’s financial director (and the daughter of the company’s founder), who was detained in Vancouver on a US request for extradition on charges of violating the sanctions on Iran, Chinese authorities have resorted to “hostage-taking” diplomacy, arresting two Canadians in China on trumped-up espionage charges. Chinese authorities publicly declared that if Meng was let off, so would be the two Canadians.

Parallelly, there are efforts to form a “5G club of democracies coalition of democracies” to keep out Chinese 5G vendors.

When elephants fight, it is the grass that gets trampled. Until this week, it seemed that India would yield to Chinese suasion and accommodate Huawei in its 5G rollout plans. But there has been a hardening of India’s stand after the Ladakh stand-off, as evidenced by the ban on 59 Chinese apps. It increasingly looks like the hardline view to disallow Chinese out of strategic national security interests will prevail.

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