The US is using the arrest of the Huawei heiress to challenge China’s tech superiority
Just when the US and China had agreed to meet each other halfway in their trade war, one that had pulled the world market down by a few notches, the arrest of the Huawei heiress over violating US sanctions on Iran has brought two of the world’s biggest economies at flashpoint yet again. Meng Wanzhou, the chief financial officer and also the daughter of Huawei’s founder, one who is being groomed to take over, was picked up in Canada and is being extradited to the US in perhaps a token show of US armtwisting. Meng will probably even be let off on Monday but not after a weekend of diplomatic to and fro. Huawei is being targetted for riling the US more than once. First, it had been desperately trying to enter the US market as a competitor to AT&T, then there was the issue of filching patented technology of Cisco and finally there was the matter of insulting the efficacy of US pride, Apple’s iPhone. Somewhere along the way there were reports that the Russians and Chinese were snooping on US President Donald Trump’s cellphone conversations. And though Trump dismissed these as fake news, saying he never spoke on his iPhone or any cellphone for that matter, Huawei provocatively baited him publicly by saying the US President should then be using the hack-proof Huawei phone instead. As one of the largest telecommunications equipment and services providers in the world, recently surpassing Apple to become the second-biggest smartphone maker after Samsung, this bit was certainly about muscle-flexing. It was this arrogance that ultimately cost the company, which has now been charged with using a subsidiary called Skycom to evade sanctions on Iran between 2009 and 2014. Ms Meng, who has reportedly risen from the ranks and is expected to become one of the world’s top businesswomen, faces up to 30 years in prison, at least notionally. But the Chinese do not take kindly to mistreatment of their hierarchical icons — Huawei being a matter of national pride — and so is expected to hit back by taking high-value US tech executives working on its soil as hostage. US companies are already preparing travel advisories and gearing up for hitbacks.
The ego-driven arrest is now certain to snap the 90-day truce agreed by both parties, which is an economic imperative. But with US becoming the largest producer of crude this year and tomtomming it as an example of ‘Amercia First,’ it is using the Huawei case as a bargaining tool to get its way in trade negotiations. However, there are larger implications for the tech economy as a whole. Most Western governments fear that China will score in fifth-generation (5G) mobile and other communications networks through Huawei. Nobody seems to have bought the company’s disclaimer that there is no government control over it. Everybody sees it as a conduit for the backdoor takeover of the digital realm. Japan is contemplating a ban on government use of products made by Huawei and ZTE over cyber security concerns and New Zealand and Australia have already blocked Huawei. China is already the world’s biggest spender on scientific research after the US and is expected to overtake it in AI deployment. Chinese scientists produce more research papers than those in the US. It is China’s tech muscle that is really scaring the world.
