Washington's War on Huawei Continues

In America's war on Chinese telecom, instead of promoting and showcasing American ingenuity, Washington opts to announcing its latest substitution for it.

July 9, 2020 (Gunnar Ulson - NEO) - For Washington, Chinese telecommunication giant Huawei presents a nearly unsolvable problem. We can draw this conclusion by looking at how the US has chosen to compete, or rather, what it is substituting instead for what should be competition. 

CNET in an article titled, "White House reportedly considering federal intervention in 5G," would explain:

5G networks across the US could get a boost from the federal government, according to a report Thursday by The Wall Street Journal. Trump administration officials are considering the move so they can compete better against Huawei globally, the report says.

The Trump administration has reportedly met with US networking companies including Cisco to discuss the acquisition of Western European networking giants Ericsson and Nokia. It's also looking into giving tax breaks and financing to Ericsson and Nokia, the Journal reported, citing unnamed sources.

The article notes that the US government also sought to organize a meeting with other tech giants in addition to Nokia and Ericsson including Dell, Intel, Microsoft and Samsung to discuss "combatting" Huawei.

It is unclear how acquiring foreign networking companies already being outcompeted by Huawei would tip the balance in Washington's favor or how companies like Ericsson and Nokia with respectable market shares would benefit from being drawn into economic warfare between the US and China, two nations both companies currently enjoy doing business in.

Even in the best-case scenario it is unlikely US efforts would materialize and begin showing results fast enough to significantly or permanently set Huawei back.

A Need for Competition, Not Coercion 

The US appears to have done everything in its power to fight Huawei besides actually competing against it.

Competition would involve the creation of technology similar or superior to Huawei's either in terms of performance or cost, or both.

The US is unable to do this as even its own largest smartphone manufacturer, Apple, has all of its phones made in China. The fact that the US' most recently announced and perhaps most drastic measures so far against Huawei involve "investments," "equity firms," "acquisitions" and "holding companies" rather than improving education in relevant fields, domestic manufacturing and technical expertise, reflects a fundamental inability for the US to compete against China on equal terms.

As long as the US insists on facing its growing problems by moving numbers around on financial ledgers rather than picking and placing components on circuit boards inside the US, it may temporarily delay Huawei's rise but in no way stop it.

If anything, these roadblocks force Huawei and others to restructure themselves in more resilient ways that will make it even more difficult in the future when and if the US ever decides to take on China through actual competition.

Another note; Huawei's 5G technology will undoubtedly do more than merely build Huawei up as a telecommunications company. It will give nations deploying Huawei's 5G infrastructure an edge across a multitude of IT-related economic activities, giving them an advantage over other nations forced to settle on alternatives because of US pressure to do so.

If these alternatives truly suit a nation's telecommunications infrastructure and serve its economic potential that is one thing, but if these alternatives were picked because of political reasons it will cost these nations not only politically with China, but also economically.

US vs. Huawei: Real Security Concerns or a Smear Campaign? 

The CNET article would also repeat the justification for Washington's growing hostility and aggressive tactics turned toward Huawei, claiming:

Huawei was blacklisted last year by the US when it was added to the United States' "entity list". In addition, President Donald Trump at the same time signed an executive order essentially banning the company in light of national security concerns that Huawei had close ties with the Chinese government. Huawei has repeatedly denied that charge.  

These "national security concerns" have been expressed now for years by the US yet no evidence has been presented.

It is interesting that even attempts across the US-European and even Australian media to explain Washington's growing obsession with Huawei generally admit these concerns are just an excuse and that protecting US dominance over global technology and the economic power and influence it provides, is the real goal.

ABC (Australia) in its article, "Huawei and Apple smartphones are both made in China, so what is the difference?," would note:

Professor Clive Williams from the Australian National University's Centre for Military and Security Law told the ABC that to his knowledge, no evidence has yet been provided of Huawei conducting espionage.

"Huawei is ahead of the field in 5G research so it could be an uncheckable way of reining it in and limiting its market share.

Uncheckable accusations (or later, proven-to-be-false accusations) have become the bread and butter of US foreign policy helping to grease the wheels of everything from economic warfare to literal wars.

China's Huawei Continues to Move Around US Sanctions

December 26, 2019 (Gunnar Ulson - NEO) - By establishing facilities in Europe to produce components, Chinese telecom giant Huawei is continuing the process of circumventing US sanctions amid a wider US-led trade war aimed at artificially quelling the growing trend of foreign companies outcompeting long-entrenched US monopolies.

US State Department-funded media platform, Voice of America, in an article titled, "Sanctions-Hit Huawei Plans Components Plant in Europe," would claim:

Chinese telecommunications group Huawei is working on a plan to build its own components at a site in Europe, its chairman told AFP, after it was hit by U.S. sanctions.

Huawei chairman Liang Hua would be quoted in the article as claiming:

"We are planning to manufacture our own components at a production site in Europe in the future," he said in an interview at AFP's headquarters. "We are conducting a feasibility study to open a factory in Europe for this. The choice of country will depend on that study."

Finally, the VOA article would quote Liang Hua as noting:

"In the area of 5G technology, we are already no longer dependent on the supply of chips and other components from American companies."

The VOA article would also admit that despite full-spectrum pressure from the US, Huawei continues to break records in terms of sales while it continues investing in both growing its market share and moving around US sanctions.

The US-led trade war aimed at firms like Huawei who have recently begun to pull ahead of their US counterparts was meant to hinder, setback or entirely overturn the competition with minimum effort on the part of US firms. Instead, it seems to have only compounded the troubles of American firms unable to compete against Chinese alternatives, while hurting US companies providing parts for or receiving final products from Chinese companies like Huawei.

Too Little, Too Late 

Huawei is already a massive enterprise with a global-spanning business coupling together it with other businesses and even other nations around the world. It possesses a momentum of its own that even in the face of immense setbacks, is able to continue moving forward.

US efforts to curtail or even cripple the firm appear to only be providing temporary setbacks while providing the Chinese firm with impetus to create a more self-sufficient and resilient business model in the intermediate to long-term.

The fact that US sanctions have led to Huawei circumventing any need to deal with US firms to acquire components for its 5G telecom network technology is one example of this.

The US forcing Huawei to move on without Google appears to only have set back the company temporarily while in the long-term illustrating that Google may not be as indispensable as it and the US government attempted to portray it as.

It is likely that this process will only continue, as the necessity for the US to invest in a genuine strategy to compete in terms of developing better business models and through technological innovation over cheap and unsustainable (not to mention ineffective) political tricks seems lost on Washington and the special interests lobbying it to pursue the current regime of sanctions and smears.

While US tactics have set back Huawei in certain terms, they have also set back the interests of US businesses themselves; both businesses that had until recently supplied Huawei with components and thus were rising alongside Huawei throughout its continued success, but also for companies that sold Huawei products or, like Google, placed their products and services within Huawei's final products (smartphones).

Stitching China and Europe Closer Together 

While Washington has attempted to portray Huawei and other Chinese firms as global pariahs as well as threats to security, the fact is that many nations prefer to do business with Huawei, having conducted their own assessments of the company regarding any potential security threats it might pose to their respective nations and telecom infrastructure.

Nations acquiescing to US pressure do so for political rather than practical reasons, with many fully understanding the high cost of their acquiescence. The nations of Europe, who find themselves under constant pressure from Washington regarding a wide spectrum of issues, has begun taking steps to likewise move out from under Washington's shadow and to conduct business freely with whomever it desires and with whomever offers them the greatest benefit.

Huawei's plans to produce components in Europe will be one step further in helping both the Chinese firm and its European partners step out together from under US coercion.