Huawei, a Chinese tech company, is no doubt on a tight rope. What is somewhat surprising is the massive global coverage given to the events surrounding the company vis-à-vis the extent to which the Chinese government has gone to apparently own Huawei’s problems, and the politics of it all. Countries are invariably forced to declare which side they are on; US or China.
The telecom unit of SoftBank Group (Japan) has just selected Nokia and Ericsson as vendors for its 5G network, excluding its long-time supplier Huawei Technologies in the process. Nokia will be a strategic partner for 5G rollouts, and Ericsson a supplier of radio access network equipment. Note that Huawei and ZTE – also a Chinese tech company – were vendors of 4G to the Japanese company, but they have obviously been excluded from 5G.
President Trump of the US has a mission to have all American allies ban Huawei’s equipment from their networks, and has placed Huawei on export “blacklist” that prohibits the company from buying American software and components. Australia and New Zealand have prohibited equipment made by Chinese companies from their networks. Japan has also said it would exclude Chinese-made equipment for security risks. It might as well be the case that the two other major telecom carriers in Japan – NTT Docomo and KDDI – will also give Huawei the cold shoulder.
Just as the US is watching which ally is not on its side in the Huawei matter, so also is China. The statements of Lee Seong-hyon in the Korean Times of 31 May 2019 are illuminating: “Amid deepening rivalry between the U.S. and China, Beijing has grouped neighboring countries into three categories. One: staunch U.S. allies such as Japan. China coldshoulders these countries, treating them with a “businesslike” attitude. It keeps a minimum contact with them, while engaging in business when it suits its own interests.” Mr. Lee continues, “The second group is “pro-China” countries such as the Philippines. They are sensitive to economic incentives. These countries are also keen to utilize China’s Belt & Road Initiative (BRI). China showers them with economic benefits to keep them loyal. The third group is “opportunistic” countries such as South Korea. Instead of luring them with economic benefits, China’s recipe is to trample them. The THAAD dispute with South Korea happened to be the first case in point. China was conscious of the “audience effect.” That is, it knows neighboring countries would “watch” how China deals with South Korea, when the latter acts against its will. If South Korea goes unpunished, other countries in the region are also likely to follow suit, disregarding Beijing’s warnings when similar incidents happen in the future. China punishes a country like South Korea severely so that it will serve as a “palpable” lesson to the other countries in the region. It’s the classic tactic to “kill a chicken to scare the monkey.”
Japan is on the side of the US, and SoftBank has banned Huawei on 5G. It also seems to make sense that even though Europe isn’t much of a fan of American President Trump, the continent will eventually side with the U.S. on this Huawei matter. Moreover, we are beginning to see previously staunch Huawei’s customers in Europe begin to stand on the fence. After all, Nokia and Ericsson, fierce European competitors of Huawei, have now been chosen by SoftBank to provide 5G services.
China has consciously worked extraordinarily hard to attain, in a relatively short period of time, the success that it is currently trying to enjoy. (If only countries like Nigeria could learn from this and stop shamelessly asking for handouts from China!)
Ivo Daadler in his 30 May 2019 article in Lacrosse Tribune acknowledges this fact: “Much of its (China’s) growth was the product of internal effort. But all too much of it was the result of nefarious and predatory practices – stealing of blueprints and technology, large government subsidies to key industries and the closure of large parts of the Chinese market to foreign competition, even as Beijing enjoyed full access to U.S. and other markets.”
Daadler also points out that China is using its economic might to exert influence beyond its territory: “It’s ‘One Belt, One Road’ initiative stretches through Southeast and South Asia on to Africa and Europe. China finances loans, provides plans and employs its own workers to build sea and air ports, rail and road links and other critical infrastructure throughout the world. Failure to repay loans in time can result in seizure of assets, as Beijing did with a port it built in Sri Lanka.”
Some leaders in developing countries appear to be naïve enough to think that China is helping them build their countries with only a few weak strings attached. Those countries may be surprised when they realize they might have comprised their option to choose. In terms of the “big stick,” I think any world power would probably do the same thing that China is doing.
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Publish date : 2019-06-03 11:24:12