The Battle over Huawei

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BERLIN/WASHINGTON/BEIJING (Own report) – With the USA escalating its measures against Huawei Technologies, Berlin is faced with deciding whether to continue its cooperation with that Chinese telecommunications company. Until now, the competent German administrations have been considering cooperating with Huawei for the development of the important 5G mobile communications standards. With its experience, the Chinese company could reliably set up the German network rather quickly and at favorable costs. For German business, it is of utmost importance not to fall behind even further in the development of future state-of-the art technologies. Washington, however, is pushing for the Chinese company to be excluded. The Trump administration – without any evidence, according to experts – is accusing it of having close ties to the Chinese government and intelligence agencies. Washington is indeed seeking to damage Huawei seriously – the world’s largest network provider and second largest smartphone producer – to halt China’s ascendance. Berlin must decide whether it wants to join that battle against Huawei in the economic war against Beijing.

The US Boycott Campaign (I)

US measures designed to damage China’s Huawei Company are anything but new. Already back in October 2012, the House Intelligence Committee of the US Congress concluded that Huawei Technologies and a second Chinese company ZTE Inc. were “a national security threat” to the United States and explicitly warned against using Huawei products.[1] In the meantime, the CIA and FBI have officially seconded that warning, asking private consumers to refrain, as comprehensively as possible, from buying Huawei smartphones. Washington is also applying pressure to private enterprises not to conclude deals with the Chinese group – and companies, such as AT&T and Verizon, have decided not to sell Huawei products in the USA. The US government is also urging its close allies to join the boycott against Huawei. Australia, for example, had banned the use of Huawei technology in its development of the new 5G mobile communications standard. It was recently announced in New Zealand that the intelligence service had issued a corresponding ban. In Canada, identical demands are being raised. British Telecom has announced that Huawei products will, at least, be excluded from the core of the 5G network it is establishing. Yesterday, Japan joined this trend. The Japanese armed forces and all segments of the government have been banned from using Huawei and other Chinese products.

Suspicion Rather than Evidence

“A Sort of Kidnapping”

The US Boycott Campaign (II)

The Price of Boycott

This could have serious consequences for the German economy. Until now, the Deutsche Telekom had relied on Huawei technology. The Chinese company is a favorite candidate in the decision, as to who should expand the 5G network. Observers note that Huawei has the most experience and can offer the best prices. Higher prices can be easily handed down to the consumer, but any sort of delay in expanding the network, due to a lack of experience, would be a painful loss to the German economy. According to one study, in Europe, Germany ranks 32 – out of 36 – in the current 4G LTE standards, “right behind Albania.”[9] If this also happens with 5G, it could mean missing the boat on state-of-the-art technology. In addition, of course German companies are otherwise using Huawei products as well as those of other Chinese companies. It would be very costly for German companies to make the change to the required non-Chinese equipment, to be able to continue to pursue US government contracts.

Facing a Decision

However, open opposition to US demands, threatens consequences for companies doing business in the US, business that is indispensable for many German companies doing business abroad.[10] According to experts, Washington seems to begin to unhitch western hi-tech from China, to halt the People’s Republic of China’s ascendance. If Berlin wants to maintain alliance with Washington, considering its profits from business with the United States and the advantages of military cooperation within NATO, Germany is facing the decision whether to go along with this unhitching. This would include billions in losses from its current business with China.[11]

Full article: The Battle over Huawei (German Foreign Policy)

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