Sorry U.S., Huawei will Become Stronger, Better and Safer
“The China-US relationship can never be too good or too bad” or so believed Deng Xiaoping, the chief architect of modern China. Today, however, there are new views according to which the China-US relationship will never return to how it was in the past, and that it cannot avoid the “Thucydides trap.” It is arguable whether China and the United States have started a “new Cold War,” but the trade and technology war is clearly already going on.
Around the middle of the 20th century, the two leading opponents of the Cold War, the United States, and the Soviet Union launched a protracted “space race” in order to compete for leadership in space technology.
Today, history seems to be repeating. The US’ new rival is China, and the new battlefield is 5th generation mobile telecommunications (5G) technology. 5G is much faster, safer and more reliable than current 4G networks.
According to reports, the global 5G infrastructure market was valued at around $1.3 billion in 2018 and is projected to reach $2.86 billion in 2020 and $33.5 billion by 2025, at a compound annual growth rate (CAGR) of 50.9% between 2020 and 2025.
In 2018, Huawei, China’s telecoms giant, dominated a 22% share of the world’s telecom-equipment market and almost half of the 5G market share globally, followed by Finland’s Nokia (13%) and Sweden’s Ericsson (11%). Obviously, Huawei has become a victim of the US-China global power competition, simply because the company is from China and currently leading the 5G technology R&D.
To hinder or even destroy Huawei, the US government has recently launched a series of deliberately planned campaigns, which will likely fail, as its accusations are based on numerous false, unproven, and untested propositions. The US Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products.
Ironically, America’s fear over Huawei has inadvertently shown the whole world how advanced the company’s technologies are, and paradoxically, the US’ attacks on Huawei are only encouraging the company to become stronger, better and safer.
Firstly, Huawei will become stronger. The US might think that the arrest of Meng Wanzhou, CFO of Huawei and daughter of the company founder Ren Zhengfei, would be catastrophic for Huawei. In reality, the incident has only had a limited impact on the company, as it relies on comprehensive systems rather than on a single employee.
More importantly, as Mr. Ren has revealed himself, Ms. Meng could not be a successor forever.
Instead of damaging the company, Ms. Meng’s arrest has boosted morale among Huawei’s 180,000 employees, and they are now more united and motivated.
Secondly, Huawei will become better. The US has openly urged its allies to boycott Huawei 5G equipment. Even if the US and its “Five Eyes” intelligence network allies (the UK, Australia, Canada, and New Zealand) collectively reject Huawei, the company can still survive as its markets cover around 170 countries. Huawei has a 38% revenue market share in Asia Pacific, a 30% share in Europe, but only a 2% share in North America.
Moreover, Mr. Ren is quite confident that if Huawei can develop better technologies and products, it will be too good to be denied by customs. The launch of the impressive Huawei Mate X folding phone at the recent MWC Barcelona 2019 shows the company’s commitment to cutting-edge technology and tireless innovation.
Thirdly, Huawei will be safer. According to its Global Cyber Security & Privacy Officer, Huawei is the most open, transparent, and scrutinized company in the world, and its approach to security by design development and deployment sets a high standard that few can match.
People may not be fully convinced by Huawei’s own claims, but it is easy to foresee that in the future, it will be nearly impossible for Huawei to be owned, controlled, or influenced by the Chinese government. Therefore, Huawei will have to uphold the strictest safety and privacy standards for its 5G equipment so as to address the security concerns around control or manipulation by the Chinese government.
The 5G era is coming, whether with Huawei from China or Qualcomm from the US. If we just let all market players compete freely and fairly, the entire world will benefit. The US is always proud of being the world’s premier free market economy, but it is now suppressing free and fair competition from Huawei.
Industrial sources estimate that allowing Huawei to compete in North America would reduce the cost of wireless infrastructure by 15%-40% and save at least $20 billion over the next four years. For the sake of US consumers’ interests, it will be unwise to rule Huawei out of its market.
Even if the US government insists on banning Huawei forever so as to service its own political and national interests, other countries, especially many developing ones, shall make wise choices. If Huawei can offer more cost-efficient and technologically advanced 5G networks, why not welcome it?