Can the US stop Huawei's expansion? | Inside Story By Al Jazeera English

Anyone but Huawei, that's the message from the US as it considers financial help for countries upgrading to 5g technology. Huawei says it's not controlled by Beijing bureaucrats. Why is Washington so worried by one of china's most successful and innovative companies? This is inside story. Hello. Welcome to the program, I'm Bernard smith. The United States say it's willing to finance other countries, 5g networks, so long as Huawei isn't involved.

President Donald Trump accuses Beijing of using its influence over Chinese companies to spy on other countries in the UK, Huawei has been given permission to build a new research facility. That's while the country's cybersecurity agency conducts an emergency review into the use of Huawei's 5g equipment, the Chinese firm says it will invest more than a billion dollars in its new site in the east of England, while insisting the focus will be on the development and manufacture of semiconductors, which, according to Huawei, are not targeted by U. S. sanctions. But Washington has warned the British government that the decision to approve the new project will put its trust in the UK at risk.

The U. S. department of state has issued a statement saying it believes countries need to be able to trust that partners will not threaten national security, privacy, intellectual property or human rights. Adding a company such as Huawei is subject to an authoritarian government that lacks an independent judiciary or rule of law that would effectively prohibit the misuse of data. The statement also urged allies like the UK to carefully assess the long-term impact of allowing what it called untrusted companies like Huawei access to sensitive information.

Now the US and china have been at odds over trade and economic policies for the last two years when the crisis began, in 2018, trade amounted to more than 737 billion dollars, but it's declined considerably. Since then, in January, Washington and Beijing agreed on a first step towards a truce. China promised to open up its markets and buy more American goods in exchange, the U. S. agreed to lift some of its tariffs, but not all leading to yet another standoff and the International Monetary Fund cited the dispute when it cut projections for global growth to the lowest since 2009, let's bring in our guests joining us from New York is john Biggs, a reporter for tech crunch in Beijing and the mock a senior research fellow at the center for china and globalization and in London, Nishant pastry, a visiting researcher at the Alan Turing institute at the university of surrey in the United Kingdom.

Welcome to you all john I'll begin with you. I guess a straightforward question for you: what will 5g? Let us do that 4g, can't how important is it going to be for a country's economic development uh? In many cases, it's going to be very important. The biggest difference in 5g is the internet speed you're going to get. I guess you could say landline speeds the sort of speeds that you get in a home in an urban area in the U. S.

which is connected to the fiber optic cables or other systems you're going to get that over the air, and you should be able to get that uh countrywide uh, depending on the coverage of 5g products, 5g routers. So it's going to be a huge difference: okay and Nishant. What are the major technological innovations that can be exploited by 5g or the 5g can exploit? What are you looking forward to so uh 5g itself is uh is a standard, and it's the next generation from the previous 4g that we are used to and several new applications have been proposed, ranging from some more forward-looking ones, such as remote surgery or connected cars, to even just being able to download your movies much, much faster than you can in today's technology. So that's the promise of 5g, okay and Andy. Artificial in intelligence is one particular area.

That's going to benefit from 5g. I understand, and china's particularly invested in that particularly in developing mass surveillance technology and facial recognition. Huawei has helped to develop this, so you can see why, if Beijing is a china is a country in tolerance of political descent, other countries might be suspicious of working with companies that work with the Chinese government. Is that a fair point? I think it is. I mean there are two issues here.

So AI, artificial intelligence and 5g are complementary technologies, and they are the classic uh disruptive technology like electricity, in that it can be used for everything, as our earlier guest said, for consumer applications, industrial applications even military applications. So I think any time there's a new disruptive technology. Uh people are concerned, and I think that they rightly should be. Technology is a double-edged sword, which is why I think it's important that we all work together, uh to ensure that there are proper standards, proper safeguards uh, so that everyone can not only be safe but also feel safe. John is the U.

S. right to be very nervous about Huawei's dominance in fire in the 5g market um. I think it's kind of a. I think it's kind of a silly statement in terms of in terms of Huawei's dominance versus siemens dominance versus Nokia's dominance. You can get 5g hardware from multiple sources right now and for them to single out Huawei is a bit unfair.

Obviously there are some issues, Huawei, obviously there are some concerns in terms of privacy, in terms of security, etc. , but to completely cut someone out of that space is very dangerous and very damaging, and absolutely I want to. I want our 5g to be as secure and super as possible uh, but I think that a box on a light pole somewhere in the middle of Brooklyn has very, very little to do with this whole political uh storm. That's brewing Nishant. Do you think the US is right to be putting such pressure on European governments on Asia and African governments not to get involved with Huawei because of the fears of so surveillance? So let me be clear, so um, so maybe I should actually clarify that this is a highly political question, so I should clarify that I'm talking as an individual rather than as a representative of any organization.

So you know you introduce me as a visiting researcher at Alan Turing institute and a professor at the university of surrey, so I'm not representing any of these institutions when I'm saying these things and not even as a professional but as an individual. So what I would think is you know this uh hurting back to what the previous speaker was saying. Um. If you shut out one entity amongst a set of competing entities, then you are decreasing the space of competition uh around the technology. Now this is a fairly maturing technology at this point, so the main research that went into 5g happened in the last four or five years, but still there's a lot of innovation to come and if you're shutting out one aspect or one entity.

That's that's playing a role in that innovation, then you're, shaping that innovation you're curbing the way in which that innovation can spread, and so in that sense I would say perhaps there should be more openness around it. Now I recognize, as the previous speaker said, that there are security concerns, but the precise nature of those security concerns uh are have not yet been made clear for whatever reasons. Maybe there are national security reasons and so forth, but without full details it would be hard for me to say why a country should stop one of the competing entities such as Huawei from competing in a market for what would be uh. You know several billions of dollars of uh um commerce that would arise from this all right Andy. How did Huawei rise to this dominant position? How much help has it had on the way from the Chinese government? Well, I think there are a lot of misperceptions and maybe even disinformation about this.

So Huawei, I think, is the classic Chinese startup success story, perhaps not that different uh from a Hewlett Packard or an apple meaning started in someone's garage, became phenomenal and successful to be a global uh. A company of global significance in that following was started by a man named Lyndon Faye, who is a former engineer, started out reselling computer hardware invested in r d very significantly and literally over decades, of built Huawei into a global technology leader, and I think it's important to recognize here that Huawei is not just the leader in base stations, the kind of equipment that people typically don't see that the telcos buy, but all the way through smartphones, so Huawei is also one of the top uh handset companies in the world as well. Uh making other devices uh so really soup to nuts to use an American expression- Andy just sorry to interrupt, but the Wall Street journal reported last year that 75 billion dollars worth of state support had gone to Huawei during its uh birth and creation. It couldn't have got where it is without that support sure. Well, my understanding of this is that uh Huawei has a number of customers, so private enterprises, state-owned enterprises, universities, uh government institutions or government ministries- I should say, but that this is not just limited to China, but uh all around the world.

So again, if we think about the centrality of telecommunications, it really is like electricity that no modern society, no modern country can function without it and Huawei really is providing the backbone of this. I don't think it's that surprising uh that Tarawa would have significant government revenue uh, including from the Chinese government, but also from other governments as well. John could Huawei have got to where it is today without significant support from the Chinese state. Well, it depends on what you, what we consider uh significant support, if they're, if they're literally shoveling money into the organization to ensure complete control over the technology, that's a little iffy, but look at Motorola. Look at any one of these companies that uh that have received grants that have received contracts uh to build out the infrastructure for uh for the 21st century and all those folks are getting billions of dollars.

In government grants we don't know where it's all this stuff is opaque right. We don't know how much Motorola got to uh to build out infrastructure in the US. We don't know how much Nokia got uh from the European Union from any number of countries to build infrastructure elsewhere and um.75 billion is a big number, but it's also a big country, and you need a lot of. You need a lot of infrastructure to get something up and running like even a 4g or 5g network. It's its a massive undertaking.

So did they get that money as bribes, or they get that money as a don't know to uh to offer security holes? We don't know that. Is that a danger absolutely, but is that is a would a traditional technological uh advance that is open, has a full standard and is able to be understood by somebody with a little more technical expertise than even us on the call. Would that prevent me from wanting to use their software? If I have that access, if I can understand what that router is doing, probably not well, then why is the US, john Fallon, so far behind in developing this sort of technology? It's 5g companies are tiny in comparison, the the manufacturing we're we're a big manufacturer, but we're not a high-tech manufacturer. Unfortunately, uh on the coast, you could say that we're a high-tech manufacturer and also, if you want to talk about falling behind, I think the uh. I think one of the primary issues there is his name starts with t and ends with trump um.

We've uh we've broken a few things here in the country, and it's problematic, and it's very, very frustrating and- and I think everybody is trying to work themselves out of that hole, we're working on uh, we're working on uh, AI, we're working on autonomous vehicles, etc. , and all that stuff needs 5g and all that stuff needs 5g now to get working for the next 10 years next, five years, even so, this is a. I guess. This is a big ramping up and it's going to it's going to slow things down. Unfortunately, Nishant is it possible for other companies, Ericsson, Nokia, Samsung they're- they have the similar technology to Huawei.

Can they compete? Can they catch up? Can other companies catch up or is Huawei too far ahead so far ed? So the thing to emphasize is that communications, telecommunications, industry networking industry uh has been coming up mainly because of this process of standardization. So 5g is not called 5g without everybody agreeing on what 5g really is right, so it's you know released so-and-so of a particular organization. An international organization called the 3gpp, which is a historical anachronism in the sense that it's called 3gpp, and it's standardizing something called 5g. But everybody agrees on what 5g technology is, and there are different companies that got mentioned. You know Ericsson, Nokia, Cisco and so forth, who also adapt and implement equipment to the standard.

So, yes, there are other companies apart from Huawei, who can also uh, give the same kind of functionality that Huawei is offering Andy. If you've, if you're a company, that's benefited so much from government support down the line. The government's going to want to be able to ask a few favors: isn't it the government's going to be able to want you to help them out? Well, I question the premise of that question, but let me go back first and talk a little about why the U. S. lost technological leadership, because if we look back to the days of a t and bell labs, the U.

S. was the unquestioned technological leader and what happened? I think that the uh demand for quarterly profits. Uh. Really the capitalist system created these pressures where short-term revenue, short-term profits became the top priority, so RNG was cut gradually living the way, so the company's ability to be on the technological leading edge in telecommunications, uh really was lost and Huawei hadn't been a publicly listed company, might not have been able to invest as much as they do uh in RNG, so they are a private company and, as a result of that, I think, are insulated from these capital market uh questions. Now, whether they will be subject to pressure from the Chinese government.

I think it's difficult to say because any company, whether you're at Microsoft, your Google, your Cisco uh, you know, as we've seen in cases in the United States uh- has been pressured as we've seen through the slogan revelations the other uh revelations that this can happen in any country. So I don't know that this is a risk that is unique to China. What we do know, though, is that Huawei has said they are a private company they in what they say. They are a private company, but that they place the trust of their customers about uh. Above all else, and when push comes to shove, we have to see what happens.

I suppose the problem is when Huawei says it's a problem when Hawaii says it's. A private company is that we know that the system in Beijing is not open. So there's no way of telling really what Beijing the government is telling Huawei to do. Well, I think uh certainly uh it's a different governmental system and if we look at a place like the US, the UK, maybe some other countries. Yes, there are different standards of public transparency.

I think that that is true. Uh different countries have different norms, different systems, different regulations, and that is just, I think, it's part of the Chinese system. Okay, john one of the suggestions of proposals from the Trump administration is supporting open network uh technology. Is that a serious way of getting around Huawei's dominance? Would that work? Well? Presumably, the 5g standard is open as well. So I mean, I think, I think the problem with getting three tech nerds on a call like this is that we kind of understand that a 5g box is an uh is fairly primitive in terms of in terms of what it's supposed to do in terms of what it can do and in terms of what it's designed to do so an uh.

So a box like that- and it would be far more- it would be far more lucrative to uh to hack into a Nokia call switch or some sort of uh Nokia system and hide something in there because nobody's looking there. Everybody's scrutinizing the Huawei stuff right now, but in terms of um yeah in terms of the dangers there they're fairly limited and also open standards, are open standards. We already have open standards, and presumably this is an assumption on my part, I don't have one in front of me. Presumably anyone can open up one of these 5g boxes and see what's going on inside uh disassemble, the operating system understand the operating system, etc. There's lots of places to hide nooks and crannies, where you could hide something: that's uh, that's dangerous, but even an open standard is dangerous because it can be, it can be tampered with at the at the manufacturing level at the installation, level, etc.

There's no perfect way to install these things and there's no perfect standard. That's going to make these things completely impervious Nishant. Do you think supporting open network technology is a way to stop one company being dominant, I'm conscious of not trying to make this all about Huawei, but maybe suggesting that other companies can get into the 5g business? Actually, maybe it would be useful to lift this up from this particular context? To you know whether governments other governments, apart from China, put pressure on companies- and you know, you've seen various cases, for example uh with political ads and what should be allowed on social media platforms and what should not be allowed where the US government, the EU, have all had very, very uh, strong opinions and they're going to try and impose those opinions on the companies and the companies likewise have very strong opinions on what they should support on what they won't support, um. So as just one example, what we are seeing with our research is that there is actually uh more privacy loss from uh. You know third parties such as google ad systems and Facebook uh ad systems in the UK in the western countries than in comparison uh with china uh, where these uh big companies are blocked because of governmental policies.

Right so uh you could? You could see a case for um a governmental pressure, uh, uh is being put against google and Facebook in in the privacy sector. In the webspace as well, not just the 5g space, but yes, so the main thing that 5g brought to the table was actually this openness, that everything would be a programmable software defined backbone or core, which would make it a much cheaper for the operators to or to deliver the services that they should, but also would uh permit more interoperability amongst the different equipment, vendors and amongst the different operators that need to uh internet work with each other to deliver this global network that we have developed today. So absolutely open. Networking is the way to go, and it's not just uh the US government or the Chinese government, and it's not just 5g or the webspace everywhere. There is this kind of puzzle which happens as with any other new technology about whom you know what should what is permissible? What is not permissible, what should be the norm, and so it's not a unique case in any sense at all, all right and Andy.

How much is all of this particularly focused on Huawei tied to this general deepening of suspicions by western powers and some Asian powers of china's ambitions? Overall? No, I think this really is the crux of the question um, that what's behind this uh really is a geopolitical uh, confrontation or rivalry in that the U. S. American hegemony or what I think the U. S. calls.

Its global leadership rests on technological superiority. So when we see a Chinese company like that is the clear not just the technological need, but also the cost as well- and this is as important, if not more so, because the big customers for 5g are not the consumers per se, but the telcos and many of them struggle with earning a sufficient return on capital. So the cost of equipment is very, very important as well. So what the US sees in this threat from Huawei is that it could conceivably lose its technological leadership that is not just consumer-based industrial-based but militarily based as well. I think this really creates a lot of uh anxiety for the US and so feels it has to stop Huawei at all costs.

All right, okay, gentlemen, well, unfortunately, we're out of time, but thank you to john Biggs to Andy mock and to Nishant pastry, and thank you too, for watching. You can see the program again anytime by visiting our website aljazeera. com and for further discussion go to our Facebook page. That's facebook. com forward, slash AJ inside story.

You can also find us on Twitter. We are at AJ inside story, and I'm at Jareena bird from me burning smith and the entire team here in Doha. Bye for now you.

Source : Al Jazeera English