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In the middle of difficulty lies a Chinese opportunity

The report effectively accuses the US government of blocking Chinese companies. “During the past few years, unspecified allegations in the U.S. have led to severe anti-market measures to block Huawei’s expansion efforts,” it says. “The roadblock is not the American marketplace, but the U.S. government. The question is why.” That roadblock has already forced Huawei to abandon its attempt to take over 3Com, and drop plans to buy assets from 3Leaf Systems.

The official reason is concern over security. The Intelligence Committee is investigating security threats allegedly posed by Chinese technology manufacturers, and has said that Huawei products may be rigged to give China “an opportunity for greater foreign espionage, threaten our critical infrastructure, or increase the opportunities for Chinese economic espionage.” The apparent fear is that Chinese-manufactured technology could include security threats built-in at the chip level and completely invisible to Western commercial security products.

Steinbock dismisses these fears, claiming that “Much of the evidence fueling lawmakers’ concerns remains classified,” and therefore unsubstantiated. “However,” he adds, “when one set of allegations are substantiated with another set of allegations, the line between investigation and maltreatment grows thin.” He notes that Huawei USA chairman Ken Hu has already written an open letter inviting a formal investigation. “We sincerely hope,” wrote Ken Hu, “that the United States government will carry out a formal investigation on any concerns it may have about Huawei.”

If the first part of the report attempts to substantiate unfounded blocks on Huawei, the latter part asks, ‘why?’ Steinbock quotes Huawei’s global cybersecurity officer, John Suffolk: “The bottom line is that you can’t assume that all things East are bad, and all things West are good. In terms of security, we have to be suspicious of everybody.” Steinbock believes that the US fears its position as the world’s technological powerhouse is under threat. He quotes Suffolk again: “What we are seeing in Washington is something of a push- back, by the nation that hopes to remain the No. 1 in the world.”

But, notes Steinbock, “After reflection, Suffolk adds: ‘I believe America actually wants Huawei to operate in the U.S. I think it has made that decision. But Huawei is now a pawn in a world trade bargaining’.” That world trade is, in fact, the opportunity in the middle of the difficulty: the huge boost in world trade and economic growth that Chinese companies could bring to the market if the US government roadblock is lifted.

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