Monday, January 18, 2021

US Loses Technology War To China, Bows To Huawei For Working On 5G

In the backdrop of anti-China rhetoric by the US, it has quietly moved to sign off on a new rule that would allow US companies to work in collaboration with China’s Huawei Technologies which was earlier shunned out by the US Department of Commerce.

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The US Department of Commerce had blacklisted Huawei last year which left the tech businesses in a dilemma about what technology and information could be shared with Huawei Technologies, the largest telecommunications equipment maker.

The listing led to a restriction on the sale of goods and technology to Huawei and raised questions about how U.S. firms could participate in organizations that establish industry standards. But this stance seems to have put US companies in a disadvantaged position as compared to the tech giants all over the world.

According to Tom Fowdy, a British political and international relations analyst, the White House is now aware of the realities that are at play. The US has effectively lost the 5G war against Huawei.

He further adds that President Trump sees an opportunity in bashing China right now over the COVID-19 pandemic, however, what he says and suggests does not tell us everything he will do in practice.

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For two years, the US had tried to shun the company and encouraged its allies to do the same, on grounds of a security threat. But not all allies followed suit. Australia did concede to US’s demands but by large no one else did including its closest ally, United Kingdom.

“The company moved fast to diversify its supply chains and reduce its reliance on American parts after the White House blacklisted the company.

This did not hinder its success in 5G, and after Britain rebuffed pressure from Washington and Germany followed suit, it became obvious that Washington’s campaign had floundered on the premise on which it was demanding countries to cut themselves off from a technology the U.S. itself didn’t have,” writes Fowdy.

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“The U.S. government wants U.S. companies to remain competitive with Huawei but their policies have inadvertently caused U.S. companies to lose their seat at the table to Huawei and others on the entity list,” said Naomi Wilson, senior director of policy for Asia at the Information Technology Industry Council (ITI), which represents companies including Amazon.co Inc, Qualcomm Inc and Intel Corp. 

Before conceding to Huwaei, the US had proposed alternatives that included buying a stake in a competitor firm like Nokia or that they invest in the technology of their own, a time-consuming move. 

Despite unrelenting pressure, Huawei has managed to sustain its position in the global market as the leading provider of the 5G technology even in the “midst of the most vehemently anti-China rhetoric ever seen in the United States”. 

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