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Academics Explain Why Huawei Found Itself in 'Five Eyes' Cross Hairs

© AP Photo / Mark SchiefelbeinSecurity personnel stand near a pillar with the Huawei logo
Security personnel stand near a pillar with the Huawei logo - Sputnik International
Chinese IT giant Huawei has reportedly found itself in the cross hairs of the Western intelligence network that is seeking to curb its growth. Speaking to Sputnik, academics explained their scepticism over the alleged security threat posed by Chinese high-tech companies.

"Scepticism is healthy and somewhat justified as it would not be the first time that national security interests have been used as a smokescreen for protectionism", Professor Peter Robertson of the University of Western Australia Business School told Sputnik, commenting on the "Five Eyes" intelligence-sharing network's reported incentive to contain China's high-tech giant Huawei.

The academic added that "it also wouldn't be surprising to find that there are commercial interests lobbying government in the US and elsewhere".

On 14 December, The Wall Street Journal revealed that in July 2018, intelligence chiefs from Australia, Canada, New Zealand, the UK and the US agreed that they needed to curb the growth of Huawei Technologies Co.

"Soon afterward, in an unprecedented campaign, some of the chiefs began to speak out publicly about the risks associated with Chinese-made gear, especially to next-generation 5G mobile networks now starting to be rolled out world-wide", the media outlet highlighted.

Journalists follow the presentation of a Huawei smartphone ahead of the IFA Electronics show in Berlin, Germany, September 2, 2015 - Sputnik International
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According to Robertson, it is hardly surprising that the leading Chinese tech company has found itself in the cross hairs of the US and its allies.

"Lack of separation of state and commercial activities arguably justify the suspicions of Huawei by Western governments", he suggested. "The increasing foreign-sourced cyber security threats further heightens the need for precautions".

For his part, Wilson Tong, professor of finance at the Hong Kong Polytechnic University, emphasised that "there is simply no solid evidence of risk and threat from Huawei".

"Even a column in Financial Times admitted that 'you cannot have concrete proof of interference in ICT (from Huawei through their hardware equipment or software system), unless you are lucky enough to find the needle in the haystack'", he said. "Yet, a series of incidents starting from the [imposition of] penalty on ZTE to the recent arrest of [Huawei chief financial officer] Ms Meng Wanzhou suggest a concerted effort instead of an isolated incidence. The best way to reason out is that it is an effort to curb the growth of China, and the master behind is clearly the US".

Logo for Huawei at a launch event for the Huawei MateBook in Beijing - Sputnik International
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The Hong Kong-based academic pointed out that one of the major issues of the US-China trade spat is Beijing's "Made in China 2025" programme.

"It is simply a goal of the Chinese government to increase the Chinese-domestic content of core materials to 40 percent by 2020 and 70 percent by 2025, an initiative to comprehensively upgrade Chinese industry, especially in the hi-tech areas. Hence, it is purely an economic objective of a country", the professor underscored.

However, it is seen as a threat by the US, he noted, stressing that because of that, Washington demands that China should give up the initiative.

"It makes no economic sense as it violates the essence of open market competition", the academic opined.

Huawei's Non-Chinese Rivals Likely to Benefit From the Crackdown

There have also been concerns that containing Huawei and its 5G technology could raise prices and slow down the innovation process worldwide.

"That would definitely be the case and that is why it makes no economic sense and everybody loses", Tong warned. "Shunning of Huawei will jeopardize the 5G and information and communication technologies (ICT) development, which would bring adverse impact to the global market and the global economy".

Meng Wanzhou, Chief Executive Officer, Huawei Technologies, attending the 6th Annual VTB Capital Investment Forum Russia Calling at the World Trade Center, October 2, 2014 - Sputnik International
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According to him, "the biggest mistake is to view the world market, the world economy as a zero-sum game so that the growth of a company or a country is at the expense of other companies or other countries".

"For sure China would suffer more relatively to US in the short run. In this sense, US would 'benefit' the most as it would prolong the supremacy of US in the innovation and technology areas in specific and the world economy in general", he predicted, expressing confidence that China could benefit from this as it may force China to put more resources in self-development.

Tong highlighted that China "is a large country of over 1.2 billion people" with "domestic market already large enough to support all sorts of research and development activities and absorb self-developed products and the 5G system".

However, Robertson doubts "that any Western governments are concerned about possible negative effects from slowing innovation or rising prices, due to restricted sales on a single company or country".

"This is not only because such effects would be small, but also because the protection of the 'rules-based international order' is more important", he believes.

According to the Australian scholar, "global markets need rules in which to operate: These include rules about protection of brands and patents, rules about trade especially transparency and equal treatment of imports from different countries".

"Currently the mood in the US is that China's economy has benefited from the rules based on international order, facilitating its export based growth model over the last three to four decades, but the Chinese government is now not doing enough to protect the system that allowed it to grow", he explained. "For the US and other Western democracies, despite the enormous economic achievements China has made, its lack of political openness will always be a barrier to completely normal trade and commercial relations".

As for Huawei, all his rivals are likely to benefit from the crackdown on the IT giant, "but especially non-Chinese rival companies", the Australian academic specified.

The views and opinions expressed by the speakers do not necessarily reflect those of Sputnik.

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