Huawei comes between U.S. and allies

The smartest business insight and analysis, from all perspectives, rounded up from around the web

Huawei.
(Image credit: Kevin Frayer/Getty Images)

The smartest business insight and analysis, from all perspectives, rounded up from around the web:

British Prime Minister Boris Johnson "defied U.S. hawks" this week to let Huawei build part of the U.K.'s next-generation phone network, said Gordon Rayner at The Daily Telegraph (U.K.). The U.S. has lobbied Europe heavily to ban equipment from the controversial Chinese telecom company. But such a ban could delay the rollout of advanced services by as much as three years. Ultimately, Johnson concluded that "the potential risk to national security posed by the Chinese telecom giant was outweighed by the estimated £126 billion ($164 billion) boost to the economy" of having the 5G rollout proceed as planned. Huawei has "made considerable technological progress" in recent years, said Ina Fried at Axios, and China is exerting its own pressure on European countries that are wavering. It has threatened, for instance, "to close off a key market for German auto exports" if Germany passes on Huawei. "Like it or not," Siemens CEO Joe Kaeser said last week, "they are a year or two ahead."

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Still, this is about more than sales for U.S. chipmakers, said Annie Fixler and Mikhael Smits at The Hill. Remember, Huawei is a company with "close political and financial ties and legal obligations to the Chinese Communist Party," and "the combination of CCP ruthlessness and Huawei technology threatens human rights" and European security. Banning Huawei and patiently developing their own secure networks through companies like Nokia, Ericsson, or Samsung could add $62 billion to Europe's 5G tab. But it's either that, or "roll out 5G infrastructure quickly with a baked-in Trojan horse."

This started as a worry about cybersecurity, but it has "burst into a much wider conflict" between Washington and Beijing over whose country will develop the latest technology, said Stu Woo and Asa Fitch at The Wall Street Journal. The standoff means we're headed to a repeat of the "VHS-versus-Betamax era," with much higher stakes. "Imagine two countries with completely different sets of hardware and software for the internet, electronic devices, telecommunications, and even social media and dating apps." Unlikely as it may have seemed just a couple of years ago, "mutual suspicion all but guarantees the march toward a two-system tech world."

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