Analyst on Huawei Case: US Seems to Realize that China is Getting Ahead of Game

Sputnik: This story has been ongoing for a few months since the arrest of chief financial officer in Canada. What's your take on the US-led campaign against Huawei? Are the accusations of espionage and ties to the Communist Party founded? My colleague read out that it was political suppression, it's more than that isn't it? It's economic suppression as well?

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Andrew Leung: I think that the whole issue should be put in the context of a 360 degree push back against China on all fronts. You have the ongoing trade war and now the Huawei case is the thin end of the wedge of a technology war between the two countries, and then you have the military confrontations in the South China Sea and the so-called freedom of navigation operations; you have the continuing supply of arms to Taiwan and also highlighting or focusing on perceived violations of human rights. For example, in China, the Xinjiang Uighurs. And then you can even see that diplomatically, the United States is forming closer alliances and mounting a containment tactic on all fronts. So I think Beijing is very clear about this.

As far as Huawei is concerned, Huawei is, of course, the pride of China's technological progress. Huawei is a very special company, regardless of its origin, because if you look around the world, they come from different sectors or fields, but aside from the origin of the founder of Huawei, the company is almost entirely owned by the staff. I mean over 98% of the shares are owned by the staff of Huawei. And secondly, Huawei has a global staff, something like 170,000 people. 45% of the total staff are engaged in research and development, so it's a very high-tech company right from the start.

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Throughout the past two decades, Huawei has been working silently and diligently winning the trust of the customers worldwide, so at the moment it has penetrated this high-tech market in 160 countries worldwide and it's a remarkable achievement, because all these countries don't have to buy Huawei products, there are all sorts of other alternatives. But as far as 5G is concerned Huawei is now leading the world, even ahead of the United States. The United States doesn't produce 5G infrastructure, very little products and services are produced by American companies. The nearest competitor of Huawei, Ericsson and Nokia, European companies. But even Ericsson and Nokia are miles behind Huawei in terms of the sophistication of technology, as well as the rollout of infrastructure.

So I think that all of a sudden the United States seems to realize that China is getting ahead of the game and this is part of a perceived global threat of China threatening Americans dominance in the world, the so-called Pax Americana, which has defined world order since the Second World War, it seems to be coming to an end. That worries a lot of American strategists, and this concern is bipartisan, you can't just blame it all on the Trump administration, there are thinkers and informers and people influence on both sides of the aisle in the United States.

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Now, of course, China's trade practices also have caused a lot of other problems. It's perceived to be hereditary, there's a great deal of state subsidies it is perceived pushing all these Chinese companies, buying up technology, cornering markets and China's perceived to be forcing investors in China to share the technology or to transfer the technology, and there are allegations of intellectual property theft. So all these add up and, as far as Huawei is concerned, it is now in commanding height of 5G, as I said, threatening America's dominance.

Now when China was first helped to join the WTO, in the international liberal economic order, the hope was that China would become more like the United States, becoming more liberal if not totally democratic, opening up its economy, as at least a member of an international liberal order led by the United States. At that time China was producing Nike shoes, T-shirts and things like that at the low-end, it's not threatening America at all, on the contrary, all these products, the vast majority of the products accrued to the United States, but now China is perceived to be eating America's lunch, so Huawei's story must be seen in this context.

The views expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.