The travails of Huawei, a Chinese phone and technology company, have been much in the news lately. First there was the arrest, in December 2018, in Vancouver, Canada, of one of its directors, Meng Wanzhou, the daughter of the founder and CEO of the company – Ren Zhengfei. She was accused of defrauding financial institutions and breaching the ban placed by the US government on dealing with Iran. Since then, her team of lawyers have been working day and night to fight off a request for her extradition to the USA to face criminal charges.
The Chinese government is upset about the action of the United States and has accused America of unfairly targeting the Chinese company. There is an ongoing Trade War between the two countries, with Donald Trump imposing tariffs on Chinese products and the Chinese mulling ways to retaliate.
The received wisdom in international affairs is that trade treaties already signed between sovereign nations should be honoured, even if governments change.
President Trump has torn up the rule book. The problem is that his own rule book, by which he intends to play, is still shrouded in a certain mystery. He has announced several times that his predecessors allowed other countries to take advantage of the United States. As evidence, he points to the substantial trade deficit with China.
The Huawei saga has continued to develop, and to expand in scope.
Huawei was founded in 1987 in Shenzhen, Guangdong, in China. It produces mobile phones and fixed broadband networks. It also offers consultancy and managed services, as well as multimedia technology, tablet computers and dongles. In the thirty-two years of its existence, it has been a phenomenal success story, and a great advertisement for the can-do spirit of Chinese people. In 2018, the company made a profit of US$108.5 billion. It has 188,000 employees, 76,000 of whom are permanently engaged in Research and Development. In one year, it invested $13.8 billion in Research. In 2017, it filed more patents for new inventions than any other company in the world.
Huawei products are sold in 170 countries, and its networks reach one third of the world’s population. In 2012, the company overtook Sweden’s Ericsson as the largest telecommunications equipment manufacturer in the world. In 2018, it overtook Apple as the second largest manufacturer of smartphones, behind Samsung.
In 2018, Huawei became the subject of accusation from the US government that it was engaging in cybersecurity breaches with its mobile equipment and software. The company denied the allegation, but it persisted.
It appears, on reflection, that it suddenly dawned on the Western world recently that Huawei had become a front-liner in the cutting edge of information technology and had, perhaps, edged ahead of its Western counterparts in the area of 5G technology. Some of the countries in Europe, including the United Kingdom were already, on a purely merit basis, considering awarding contracts to Huawei for the development of 5G services which would be critical to their national security architecture.
At this junction the accusations against the company from the USA became strident. It was leaving a ‘back window’ in its software, the Americans hinted darkly, through which Chinese security agencies could intrude and monitor ‘the free world’. There was, of course, no proof for the allegation.
Some people wondered if the Trump administration wanted to use the company as a bargaining chip in its trade negotiation.
Mobile technology – the spine around which much of present-day living hangs, is a battleground between companies eager to outdo one another. The ‘big boys’ – Apple, Samsung, Huawei and others, spend tens of billions of dollars every year hiring the best brains and creating a fertile space for invention. Everyone wants to be the one that would come up with ‘the next big thing’. Much of the innovation, up till recently when the Chinese stepped in, had been centred around Silicon Valley and other parts of the USA.
Interestingly, the world to date has shown a unity in the usage of mobile technology that it does not show elsewhere. iPhones are bought and used not just in America and Europe, but even more, in China. The popular Android system is run on mobile phones made in Europe, as well as in those made in China. Common application-systems such as the Google bouquet function in phones made all across the world, from Russia to Japan. The presence of the same, or at least compatible software in mobile gadgets all across the world makes it possible for such gadgets to be bought and used virtually all over the world, irrespective of where they are made. There is, in reality, up till now, a happy, seamless technological ‘one world’.
That ‘one world’ is now under threat, principally from Donald Trump and his men. The truth may be that, at heart, they are miffed that China, from being a second-rate consumer and ‘copier’ of technology, like Nigeria, is now in the forefront of the world, in 5G technology, in aerospace, and even in military technology. This is totally unacceptable to people who see it as an act of faith that America must always be ‘number one’.
How will the high-stake drama play out?
There is a strong fear, articulated by commentators such as Fareed Zachariah, that by ‘demarketing’ Huawei, America could be forcing the tech world on a binary growth path. The Chinese could develop alternatives to Google and Android. Equipment running on such Chinese platforms may not be popular in the western world, true, but the Chinese could push with aggressive marketing to carve out alternative market domains in their homeland, Africa and much of Asia.
It would be a new technology ‘Cold War’, with China – not Russia, now as the ‘enemy’ of the ‘West’. It is not certain how such a war would play out, but it could be the beginning of the end for America’s global dominance.
Femi Olugbile
