Dubai: Mahmood Rafique, Editor: Following the Huawei blacklisting, the US technologies companies have been facing uncertainty for the past one year.
The curbs on Chinese technology giant now start hurting the US technology sector and apparently facing dilemma how they could work with Chinese firms, especially Huawei, after it was added to the US Commerce Department’s entity list.
As a result, US engineers stopped engaging with Huawei to develop 5G technology standards and were put in an uncertain position as to what information they could share with the largest telecommunications-equipment manufacturer in the world.
As a fallout of the Huawei blacklisting the US technology industry has been at a disadvantage since then and in a relatively weaker position in setting 5G technology standards and evolving them—often on the sidelines as Huawei has gained an even stronger voice.
The US administration has made a series of significant announcements regarding the future of the global tech industry. In mid-May, the US President extended for another year an executive order declaring a national emergency and, in turn, being able to bar US companies from using ICT equipment made by firms posing a “national security risk.” This has primarily been aimed at Chinese firms such as Huawei and ZTE as part of a wider trade war over the last year.
Around the same time, however, international wires reported that the US Department of Commerce may be announcing a new rule that would allow US companies to work with China’s Huawei on setting standards for next-generation 5G networks. Earlier in the year, six US senators had also sent a letter to the US secretaries of Commerce, State, Defense, and Energy about the importance of issuing regulations confirming that US participation in 5G standards-setting is not restricted by the national security entity listing. The letter cited a “deep concern” about the risks to the US global position in 5G as a result of this reduced participation.
The US administration’s latest policy updates bring to light just how complex and difficult this whole scenario is to manage. American technology companies are being adversely affected by the same policies intended to support them, whether in setting ICT standards or simply finding the most effective supply chains.
Huawei alone buys over $11 billion of products annually from the wider ICT ecosystem. Some of that money used to go to US chipset and software manufacturers, whose operations and employees are no doubt experiencing the void. American science and research institutions have also long worked with Chinese firms like Huawei, receiving financial support for their research.
The 5G technology is not a new network with limited effect, but a revolutionary one with a fundamental impact on the development of all industries. Everything we have heard about the Internet of Things, smart cities, AI automation, and so on will have another level of impact with the presence of 5G.
The steps to eliminate Huawei from competitive markets has fallen mostly on deaf ears, particularly in Europe. The EU recently decided not to ban Huawei from developing the 5G networks in its countries, only a day after the British government took the same decision allowing Huawei to develop 5G networks in the country. A report by the European Patent Office recently showed that Huawei filed the largest number of patents in Europe last year. Huawei was also recently ranked fifth on the 2019 EU Industrial R&D Investment Scoreboard as one of the biggest investors in research and development worldwide. That places the company in a strong position in developing 5G solutions and supporting digital transformation overall.
The setting of international standards for 5G technology is clearly important to the United States. It is important for everyone. As those discussions continue in 2020, it could be the issue that marks a turn in US policy, recognizing that there is in fact much to gain from cooperating with China’s technology pioneers.
