Meng Wanzhou's twist of fate in Vancouver: Huawei 5G vs. Western 'Five eyes'

Those countries imposing a staunch ban on Huawei are actually members or close allies of an organization called "Five-eye Alliance", which is the oldest and most successful alliance for collecting and sharing intelligence. Although all those countries have benefitted enormously from China’s market and want to sustain such benign relationship, they have to prioritize concerns of the US who fear their shared intelligence may be leaked by using 5G technology from its bete noire China.

Meng Wanzhou exits court following a bail hearing in Vancouver on December 11. Photo: AFP

Huawei's CFO Meng Wanzhou's arrest has escalated from a small trade war irritant to a full-blown diplomatic crisis as China resorts to a quid pro quo approach by arresting and investigating two Canadians on alleged ground of endangering its national security. Ms. Meng has been released on bail, and she now has the company of her family in a villa though under surveillance pending extradition to face charges in the US. Ms Meng may have to go through a protracted hearing process before a final decision is made if the US justice department does apply for her extradition within 60 days, otherwise, she will be freed.

However, it won't be easy for the US to extradite Ms. Meng. In an interview with reporters, US President Trump said that he may intervene in the extradition of Ms. Meng if it serves US national interest or conducive to closing a trade deal with China. Even though plagued by various probes against himself, Trump's offering to intervene seems to bear out Chinese suspicion the case is politically motivated and raise doubt on the independence of the US law enforcement. Trump may seek to gain an upper hand by tying up the issue with "trade negotiation" but unwittingly ended up in mixing with the extradition process. As a country ruled by law, Canada has a reputation of fairness and independent judiciary system, so it's unlikely it will allow any extradition driven by political reasons.

It might be a coincidence that Meng's arrest occurred when China and the US just agreed on a trade war truce and resumed trade negotiations. But thanks to Trump, it's hard not to associate Meng's arrest with the trade war which has been dragging on for too long as the two sides has hit a snag over the US concerns and anxiety over China's rise in science and technology as well as its military potentials. The US seems to have fallen into the trap of Thucydides. As the incumbent sole superpower, the US is paranoid about challenges
posed by any potential rival power.

But such worry is unfounded. China has always advocated for and never deviated from a "peaceful rise" and is striving to build up an open and inclusive "community of shared future for mankind". However, the US can't let go of the outdated "Cold War mentality" and seek to suppress China's rise in science and technology by restricting the issuance of visas to Chinese scholars, investigating Chinese scholars in the US, banning hi-tech export to China, precluding Chinese investors from acquiring US hi-tech companies, etc. Due to the resurgence of "Macxiism", Huawei seems to have fallen victim to Washington's new "political correctness" of standing up to China on every front. The Washington Post recently commented that the prosecution against Meng is stupid, and the political purpose behind it is palpable. It pointed out Huawei is not the only exporter to Iran, Samsung and Ericsson are also heavily involved, so why ignore their violation and pick on Huawei? The criticism was also echoed by Chinese media and experts, who dubbed the arrest of Ms. Meng as a political assassination against a high-tech Chinese company and a plot to suffocate China’s high-tech industry as a whole.

As the CFO and daughter of Huawei's founder, Ms. Meng’s arrest was only one of a series of setbacks that Huawei encountered in its global expansion. Australia and New Zealand have publicly stated that they will reject Huawei's bid for their 5G network; the UK and Germany will not issue 5G license to Huawei, British Telecom even kicked out Huawei equipment from 4G network. Canada is facing mounting pressure from the US to not use any Huawei equipment in 5G network. Japan has just announced that it will ban the country's three major mobile operators from adopting Chinese products in 5G.

Huawei, the crown jewel of Chinese tech prowess in telecommunications, is often viewed publicly as a source of national pride. The company has taken up a major share in supplying infrastructure of the global telecom network.  It is also the biggest smart phone vendor in the world second only to Sumsung. Most importantly, it aims to set the standard for the upcoming 5G era. In fact, Huawei owns 41% of 5G related patents, leaving far behind archrivals such as Qualcomm and Ericsson. As of now, Huawei has secured 22 5G contracts over the world, including more than 10,000 5G base stations in Europe and Middle East.  Huawei's 5G dominance is not limited to infrastructure, its first consumer-end 5G smartphone is also set to be released next year.

Early this year, another Chinese telecom giant, ZTE bears the full brunt of the US sanctions for its ties with Iran. It shall serve as a warning shot to Chinese tech companies and reveal the true strategic intention behind Trump's trade war with China. The US is bent on containing China's rise as a tech superpower. In that sense, Huawei is the next ideal target to do so. The high quality and better cost performance offered by Huawei has made its 5G hardware more competitive compared with others but also put it on a collision course with the US interest.

If the US feels threatened as it needs to maintain its tech supremacy, it would be baffling to see other countries joining the cohort to ban Huawei from their network. Besides the US, Australia, New Zealand, UK and Japan have already announced ban on Huawei from building their 5G network. Canada, Germany and France are also re-evaluating their cooperation with Huawei. The most important reason they cited is national security or fear of espionage regardless of the fact there is no evidence to show any backdoor trojans was found in Huawei’s hardware. The seemingly abrupt change of attitude was essentially attributable to pressure from Trump’s administration.

Huawei may be a good example of benefits brought about by economic globalization, but the cold war legacy still lives to haunt us. Those countries imposing ban on Huawei are actually members or close allies of an organization called “Five-eye Alliance”, which groups the US, Britain, Canada, Australia and New Zealand and serves as the oldest and most successful alliance for collecting and sharing intelligence. The “Five-eye alliance” also shares intelligence with France, Germany and Japan. Although all those countries have benefitted enormously from China’s market and want to sustain such benign relationship, they have to prioritize concerns of the US who fear their shared intelligence may be leaked by using 5G technology from its bete noire China.


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