Huawei, China’s biggest tech firm, is caught in the middle of this global tech tussle.
The first phase of the US-China trade deal that has recently been signed breaks the two-year trade confrontation between the two nations. However, word has it that the partial deal may not offer much relief to Huawei. In a bid to block China’s ambitions of dominating the tech industry, including the crucial 5G technology, the United States had earlier called for restricting Chinese companies from participating in 5G trials not only in the US, but in its allied countries as well. Citing security concerns, the move endeavoured to create a China-free 5G alternative. But despite this, India agreed to give equal opportunity to Chinese companies to participate in the 5G trials. Politically, this is also an assertion of India’s multipolar foreign policy and strategic autonomy.
Huawei, China’s biggest tech firm, is caught in the middle of this global tech tussle. Despite the company being a leader in 5G technology, the US has been urging its allies to ban Huawei equipment from their telecom networks. The US also placed restrictions on its firms supplying software and hardware to Chinese companies, following which Google had temporarily stopped providing updates to its Android technology for Huawei products.
The primary stimulus behind the ban is the possible transmission of sensitive information being carried through the company’s telecom networks to the Chinese government, thereby exposing digital networks to foreign surveillance and security threats. Apart from the US, other countries, as well as private companies, have accused Huawei and its employees time and again of stealing trade secrets, technology and also spying for the Chinese government.
Furthermore, the US has been wary over losing its tech superiority to China. These concerns also fuelled America’s move to block the takeover of top US chipmaker Qualcomm, by Singapore-based Broadcom, as it was labelled a national treasure. Fears over the weakening position of the US in wireless technologies, opening doors to Huawei gaining global leadership in technology, is believed to have led to the decision.
The world, including Europe, has been divided on whether to ban Huawei and other Chinese companies. Many countries like Australia and Japan are following the US lead. Countries who have already allowed Chinese vendors include Russia, Hungary and Thailand.
Some countries like Britain, Canada and Italy are yet to take a stand on the issue. Some are considering putting security measures in place for Chinese vendors, without imposing an outright ban. But countries like Germany have complications to deal with. China has hinted at retaliatory sanctions against Mercedes and Volkswagen. On the other side, in a bid to persuade its Nato allies, the US also said it may consider restricting intelligence sharing with countries using Huawei’s equipment. Needless to say, 5G technology has thus become hugely politicised.
India, one of the largest telecom markets, initially kept Chinese companies in a limbo. However, New Delhi has now taken an in-principle decision to give 5G spectrum to Chinese companies for trials. Industry experts have often said Huawei’s equipment was superior to those offered by Ericsson and Nokia, besides being 20 per cent cheaper.
This move gives clarity not only to Chinese vendors, but also domestic and foreign telecom firms who seek to participate in 5G trials, some of which are looking to partner with Chinese companies. Vodafone, Idea and Airtel have already applied to participate in 5G trials in partnership with Huawei.
However, speculation exists on whether Huawei and other Chinese companies would eventually also be allowed in the final 5G deployment, or the clearance will be restricted to mere trials. Arguments against the government’s decision are based on suspicions about Chinese tech companies hacking and stealing military secrets. The cloud surrounding their cosy relationship with the Chinese government and intelligence-sharing laws in China add to this concern. Another argument is the risk of sanctions on Indian companies supplying US-made components to Huawei.
Given the already-delayed 5G trials, one would look forward to trials being undertaken within this quarter itself. Huawei must be watched closely, and be urged to increase its transparency and accountability to the governments of host countries.
From a global perspective, a ubiquitous 5G network is imperative for reaping the full potential of the technology. Having inter-operability at the heart of the many industrial and consumer uses of 5G, which range much beyond smartphones to enabling the Internet of Things, we need to look proactively at a future that helps India join leading nations in the technology sector.
The writers work for CUTS International, a public policy research and advocacy group