COLIN HESELTINE. In a war against Huawei, we are the likely losers. (AFR 20.12.18)

Let’s call a spade a spade. The efforts by western powers, Australia included, to cut Huawei out of major telecommunications projects such as 5G, where Huawei is arguably the world’s leader, are aimed at containment of China (of course, we don’t officially call it this – we call it “push-back”). Much has been reported recently about the so-called technology war between China and the west (“Huawei: Australia fears the Canadian Club, AFR, 16 December 2018). Huawei is clearly at the centre of this battle. The recent arrest in Canada of Meng Wanzhou, the daughter of Huawei’s founder, is the latest – and most dramatic – development in this saga (“Meng arrest is part of America’s economic war on China”, AFR 13 December 2018).  

Ms Meng’s detention, extraordinary as it is, looks to be part of a longstanding campaign against the company which emanates from the United States. As a country traditionally known as a technology leader, the United States has been slow to develop new advanced technologies in telecommunications, in particular 5G technology, compared with companies like Huawei, Samsung, Ericsson and Nokia. It’s hard to avoid the observation that US companies are now playing catch-up, and that trade protectionism is a key element in the campaign against Huawei.

In the name of protecting national security, western intelligence agencies seem set on a course to bring down China’s most internationally successful private corporation. The evidence against Huawei mainly rests on the argument that because it has the technology to do things inimical to our interests, they are in fact doing it – or would be willing to do it if requested by its government. A similar argument could, of course, apply to any number of high-tech companies around the world. It overlooks the obvious fact that, were Huawei to be caught out, the ensuing reputational damage would bring about the end of Huawei commercially. It is highly fanciful to speculate that a multi-billion corporation, with huge amounts invested in R&D, such as Huawei, would risk this, or indeed that the Chinese government would be prepared to see it happen. It is worth noting that no country or agency has publicly produced any evidence of behavior by Huawei that compromises the security interest of client countries.

The sad irony is that during the heady economic reform period in China beginning in the 1980s western countries enthusiastically encouraged China’s opening to, and integration with, the wider world, including development of its private sector. These objectives have now been all but abandoned. Negativism towards China is on the rise as fears grow among some western countries that China’s ascendancy is a threat to the post-1945 international order. China’s growing assertiveness in the world is playing into this is, as is disappointment that its economic progress is not bringing political reforms resembling something akin to western democracy, as many had naively hoped. Rather than being viewed as a model for a successful private Chinese company, in stark contrast to over-regulated and inefficient state-owned enterprises, Huawei is now seen as a threat. Rather than applauding the emergence of a successful private corporation in China, many in the west, it seems, are trying to kill it.

This a short-sighted approach. If, as some have recently argued, the world finishes up with two competing telecommunications network systems – one Chinese and one western – it is likely that countries such as Australia that have opted out of one them for policy reasons, will find themselves missing out on the opportunity to access the full range of the world’s best technologies. Their consumers will in the long run pay the price. It should not be beyond the technological capability of western countries to devise ways to access advanced Chinese telecommunications technologies for their domestic systems, while at the same time protecting their national security interests. Outright banning of Huawei is a very blunt instrument. It would be far better to compete with Huawei, and others like it, in an open international market. Through such competition all companies from all countries would enhance their technologies and provide better, more efficient and cheaper services to their consumers. However, we are embarked on an opposite course – one of containment of Chinese high-tech companies – the end-game of which is completely unpredictable. By limiting access to the world’s world-best technologies, countries like Australia will be losers.

Colin Heseltine was twice Deputy Head of Mission at the Australian Embassy in Beijing, and Ambassador to South Korea. 

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