Is the US shooting itself in the foot by banning Huawei?

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SteelBird

Colonel
I think it's about time some of these countries decide which side of their bread is buttered.
Really, some of these countries like New Zealand, Australia, Korea. And eastern European countries like Poland thinks they can have their cakes and eat it!
I mean take New Zealand for example. Their biggest trading partner by far is China, and by a wide margin. Also, any movement in trade with China have profound impact on their economy.
Therefore what is the logic of their politicians to decide to side up with the US against their largest trading partner and think nothing is going to happen to that relationship with their partner! Mind boggles!
So what's happened. Since New Zealand ban hauwai?
Well, they have their flights returned back from shanghai. China postponed talks regarding increasing student number to New Zealand.
This is just a start. China has many more tools in their arsenal.
And lastly. I read in the western MSM that now China is a big bully becsuse it uses its economic clout to bully their trading partners. Please! As if the US never does that!
And let's face it. Why should anyone trade with a country when that country is actively seek to harm you! Mind boggles!
I think nations have less choice because the US is threatening everyone using Huawei for their 5G may face bad relations with the US. If one has to drop the US to choose China, I think many US allied nations were too hesitate to do it. I noted that the EU don't wanna ban Huawei, BT even said that there's only one true 5G provider and that is Huawei but I think they have little choice. Even if they don't want to ban Huawei, they can't choose it now. So the best solution for the EU now is "wait and see"

I am just thinking why there can't be a "talk" between the two -- US and Huawei? For example, what the US wants so it would accept Huawei? a joint-venture technology?
 

plawolf

Lieutenant General
I think it's about time some of these countries decide which side of their bread is buttered.
Really, some of these countries like New Zealand, Australia, Korea. And eastern European countries like Poland thinks they can have their cakes and eat it!
I mean take New Zealand for example. Their biggest trading partner by far is China, and by a wide margin. Also, any movement in trade with China have profound impact on their economy.
Therefore what is the logic of their politicians to decide to side up with the US against their largest trading partner and think nothing is going to happen to that relationship with their partner! Mind boggles!
So what's happened. Since New Zealand ban hauwai?
Well, they have their flights returned back from shanghai. China postponed talks regarding increasing student number to New Zealand.
This is just a start. China has many more tools in their arsenal.
And lastly. I read in the western MSM that now China is a big bully becsuse it uses its economic clout to bully their trading partners. Please! As if the US never does that!
And let's face it. Why should anyone trade with a country when that country is actively seek to harm you! Mind boggles!

That had been a gripe of mine for years that Chinese diplomacy lacks teeth. There is a reason all nations use a carrot and a stick in their diplomatic dealings.

For too long, China has relied too much on the carrot while ignoring its stick.

But the more I look at things, the more I get what China is doing.

Beijing is walking a very fine line. They know that a lot of the moves, especially the highly publicised ones, are deliberate goads orchestrated by the US.

To over-react would be playing to their hands by supplying ammunition for them to use to get others to be weary of China.

Take the New Zealand example, what would happen if China sanctioned New Zealand over its treatment of Huawei? Say ban all imports from NZ and issued investment and travel bans etc? That would nuke NZ’s economy and be pretty satisfying in the short term, but what would China achieve?

Even with such a massive overreaction, NZ is not going to change its position on Huawei, as looking to be cowed by China will be worse politically for them. Besides, NZ’s market is effectively meaningless to China in terms of size and value, so how much would China gain even if they can strongarm NZ into reversing the ban?

But what would such a move cost China, especially in the medium and long term?

It would be given that the US would use NZ’s treatment as a cautionary tail to warn others not to develop too deep an economic relationship with China least they also leave themselves so exposed.

Now consider the broader strategic picture. The belt and Road initiative is China’s grand strategy for this coming century. That would be massively undermined if countries along the route suddenly got cold feet about Chinese investment and trade.

Also consider America’s moves against Huawei. While it can be frustrating see all the attacks being one way without much of a reply from China, the world is watching, and many if not most are drawing highly unfavourable views about America’s conduct.

While America might be scoring some short term cheap shots, they are significantly undermining their core soft power fundamentals to do so.

American western ‘security concerns’ are increasingly being seen as the protectionist window dressing that it is; America’s much vaunted rule of law is being undermined by its lawfare and weaponisation of the courts; it’s component manufacturers are likely to find the going getting steadily tougher as companies and countries start to seek alternative suppliers for fear of suffering a similar humiliating feat as ZTE; and even the west’s ‘free media’ is becoming increasingly compromised as the fake news strategies pioneered against Russia and China are deployed against their own populations and generating increased awareness of their toolkit of tricks.

China is playing a very different game and to a much longer timeframe compared to the west.

As such, Chinese counter moves tend to be far less visible, but no less effective.

I think it was quite telling that NZ’s Andrew Little made such a needlessly offensive overreaction comment to a simple Huawei add campaign in NZ.

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That is not the kind of thing a senior politician would say out of the blue, so you can bet there have been significant behind the scenes pressure being exercised.

However, because that side is not reported, we just get the NZ response, which to the neutral outsider, looks stupidly hostile and unreasonable, which in turn makes their position see very unreasonable.

That is China’s game plan and strategy.

They know that the likes of NZ, Japan, Australia and even the UK are little more than US protectorates. When the US says jump, they can only ask how high.

As such, it would be a loosing strategy to try and win their over directly.

That is the primary rationale for the belt and road.

Rather than try and win over countries and markets that are staunchly pro-America on an extremely uneven playing field, China is instead creating new markets and allies.

China now has the financial and technological muscle to go its own path.

If the likes of NZ and Australia wants to ban Huawei, that’s fine, all they do is shoot themselves in the foot by delaying true 5G on their territory. Which the associated knock-on delay for development of 5G services and ancillary technology. That will allow China and Huawei to further extend their lead. Because when the likes of the US, NZ and Australia etc are still struggling to develop 5G tech, or worse, start rolling out sub-standard 5G, China is pressing ahead developing the technologies and services 5G will enable, given China critical first mover advantages in those fields.

The true battleground is the EU. They are the kingmaker, as their market size means that their choice will actually matter. And it is again with an eye on the true prize that China is holding back in the face of public provocations from US cat paws like NZ.

If China overreacts against the likes of NZ, it would effectively loose its arguments to try to sway the EU.

By showing restraint, China is in effectively reassuring the EU that it is a safe trading partner, in stark contrast to American bullyboy behaviour, which really sticks in the crawl of the fair minded Europeans. It is also why Huawei is investing some 2bn to address the security concerns of the British. That 2bn isn’t for the British, it’s for the EU to see just how seriously Huawei takes security.

If it was a competition between American and Chinese 5G standards, I think China would have won long again. It is only because Huawei’s chief 5G rivals are European that the matter is still so undecided.

But I think that also reflect on just how much better Huawei’s 5G tech is compared to the competition’s that the EU is still so undecided despite the chief beneficiaries being Europeans to a Huawei ban, and the relentless American pressure.
 

weig2000

Captain
This Huawei affair reminds me of the fiasco of the AIIB for the U.S. Huawei has the technologies, and that's far more important than America's rhetoric in my opinion. Let's be patient and see what happens eventually.

I would say it's one of several campaigns that have happened in the last few years and yet many to come, consider:

2015: the AIIB fiasco. China won overwhelmingly, with all US allies excluding Japan joining AIIB against US opposition.
2016: the South China Sea lawfare. PCA ruled in favor of Philippine, China trashed it, Duterte set aside it and pivoted to China; US conducting its FON's mostly alone. China won decidedly.
2017: the South Korea THAAD faceoff. SK government eventually deployed the system, US scored initially; China retaliated against SK, SK President Park Geun-hye impeached and jailed for corruption. Newly-elected SK President Moon Jae-in eventually
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for Beijing lifting economic sanctions. It's a draw, but China set a precedent.
2018: the US tech war against China. The US scored initially by applying export controls on ZTE, Fujian Jinhua. It followed up with indictments against Ms. Meng Wanzhou and Huawei. US launched global campaign to ban Huawei, the results are still unfolding.

There will definitely be more to come. For example, the US has raised its rhetoric significantly against China's BRI initiative. At some point, it will likely go beyond just rhetoric.
 

gelgoog

Brigadier
Registered Member
I doubt the EU will issue a blanket ban on Huawei. For one in a lot of countries the 5G rollout is already in an advanced status and Europe prides itself on being on the leading edge of wireless telecoms rollouts. For another the UK, which is the only Five Eyes nation in the EU, is bound to leave the block soon.

There is a possibility that some EU companies might push the EU towards adopting some kind of measures against Huawei though, because the other major 5G telecoms equipment vendors are located in Europe. I could see the EU engaging in some sort of tit for tat regulations and operate more on the anti-competition argument, say with fines, than with an actual ban on Huawei due to security considerations.

Especially after the scandal where the German Chancellor was spied upon by US intelligence I don't think the US's "security" arguments will have enough substance that anyone with two brain cells will care. Also a lot of people ignore this but much of the 5G market will not be in Europe. Or the USA.

Africa and Southeast Asia will be hugely important markets. They do not have the same amount of connectivity that other countries do and they rely, way, way lot more on wireless to conduct activities. In there China can easily win.
 
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reservior dogs

Junior Member
Registered Member
I think it is a very difficult battle for the U.S. to win Europe on a 5G ban against Huawei. First, Germany has a lot of export business with China that could be impacted if they ban 5G, that is on top of the business losses that they will incur at home for delaying 5G deployment. It seems very unlikely they will go along. If the Germans don't want to ban Huawei, the French and the Italians certainly don't want to do it because they will fall behind on the 5G related businesses if the Germans got a head start. While the U.S. is the biggest export destination for Germany today, the Chinese has a much faster growing market. We will have to see how this plays out.
 
here's what BreakingDefense had to (dated February 14, 2019):
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In the next six to 12 months, country after country is deciding what companies get to build new 5G networks. India and Italy remain open to a Huawei bid, at least for now; Britain, Canada, and Germany are on the fence; while France, Japan, South Korea, Australia, and New Zealand have said no.
President Trump may be
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to
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Chinese companies from selling
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5G network tech to the US. But the real war against global giant Huawei – and the
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it serves – is being waged worldwide,
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said here
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. What’s more, one told me, in order to get wavering governments to pass on Huawei’s lowball prices, the US may have to make concessions on trade and other matters. That,
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went on, is the kind of hardball art of the deal that the Trump administration may be ideally suited to make.

“We expect an executive order to come out any minute, actually, ahead of the
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February 25 in Barcelona,” said
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, a former senior advisor to the House Permanent Select Committee on Intelligence, who co-wrote a
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on the threat with his old colleague Smith. “It won’t have a huge impact on our market because they’re such a small player here” – thanks in part to a
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in Congress — “but it sends a huge message to the rest of the world that these guys are not to be trusted.”

Sending that message is particularly critical at a time when country after country is deciding what companies get to build new 5G networks.
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and
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remain open to a Huawei bid, at least for now;
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,
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, and
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haven’t decided yet; while
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,
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,
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,
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, and
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have said no. Britain’s defense minister is said to have
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about any Huawei technology in Britain’s 5G system.

“These are all huge markets,” Keiser said. “All these decisions are happening over the next six to 12 months.”

The problem is that Huawei’s products are just plain cheaper – in part thanks to favorable Chinese government loans and loss-leader tactics. It’s not easy to convince any company or country, especially lower-income ones like India, to give up the clear, immediate benefits of lower cost to protect against shadowy, long-term threats to security.

So, I asked Smith after the briefing, what does the US do? Do we need to subsidize Huawei’s Western competitors somehow? No, he said: We can’t afford to compete head to head on price – but we have plenty of other leverage to use.

“There are a number of things that every country wants from us, so we open up the trade space to incentivize them,” Smith told me. “Maybe it has to do with some policy on, who knows, H-1B visas or some specific trade issue.”

But, given what Smith himself had called President Trump’s “transactional” approach to foreign affairs – some would say confrontational – is this administration the right one to make those deals?

“I think they would open up the window for those kind of discussions,” Smith said. “I think the tactical flexibility they’ve shown in various negotiations will be a tremendous advantage.”

“The Hardest Attacks to Protect Against”

The problem is so fraught that even America’s
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partners – its closet allies who share their most secret intelligence – are
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. Australia and New Zealand have already banned Huawei from bidding to build their 5G networks. But Canada and Britain, which already have a lot of Huawei hardware in existing systems, are still struggling with what to do.

Canada’s ongoing review is
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by fears China will retaliate against a ban, just as its state security agencies seized Canadian citizens on
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after Canada
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Meng Wanzhou, the Hauwei founder’s daughter, CFO, and heir apparent. On the other side of the Atlantic, the UK government requires Huawei to let it test any components the Chinese company is selling in Britain, and British Telecom has
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not to incorporate Huawei technology into the “core” of the future 5G network.

Smith says both these defenses are inadequate. Modern information technology is too complex, and updated too frequently, for lab testing of isolated components today to reveal how they’re actually interact with a full-scale network tomorrow. And one of defining features of the new 5G networks is that they blur the traditional distinction between “core” and “edge,” decentralizing key functions in ways that improve efficiency but undermine traditional security measures based on central control.

The problem with a threat like Huawei is that their hardware and/or software are already in your network, inside your defensive perimeter. Such “supply chain attacks…. are the hardest attacks to protect against,” security expert Jonathan Halstuch told me.

After a career with Defense Department agencies he can’t divulge, Halstuch has co-founded a security company,
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, that sells high-end encryption to protect its clients’ data, whether it’s stored in their own facilities or remotely with a cloud provider. But with threats like Huawei, Halstuch told me, the crucial question is, “where are they in the architecture?”

...
... goes on below due to size limit
 
the rest of the article from the posts right above:
If you can encrypt your data before it hits a compromised component like a network router or a server, he said, you’re probably okay: Yes, the adversary gets a copy of your 1s and 0s, but they’re scrambled, with no way to decipher them. (Unless you were dumb enough to keep your encryption key in the same place as your data, he noted). But if the bad guys actually get their hardware or software on your input device – if they can track which keys your fingers hit, or record the audio of your phone call, and see your raw input before it gets encrypted – well, good luck with that.

That’s why cyber hawks say there’s no safe way for the US and its allies to have Huawei products in their networks. Once the enemy is inside the gates, it’s too easy for them to slip from one part of your network to the others, exploiting the very connectivity that makes networks so useful in the first place.

As former NSC staffer
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said during Smith and Keiser’s public briefing at the Capitol Visitors’ Center, “in cyber, any one node is all you need[:] If you can get in anywhere you can get in everywhere.” Modern ships survive collisions, when the Titanic did not, because they’re divided into watertight compartments that can be sealed off completely from one another, Bahar said: We need to start building our networks that way.

As it stands now, however, saying your network is a little bit compromised is a bit like saying someone is a little bit pregnant.

Even the Defense Department, which is forbidden by law from buying Huawei products, is concerned about the larger private-sector networks its data must often traverse.

“You have to ask yourself where are you touching the commercial side … what products like Huawei’s might be in there?” the Pentagon CIO, Dana Deasy, told the Senate Armed Services Committee on
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. “We have a very good understanding for CONUS [the Continental United States] what that looks like and what those vulnerabilities are. For OCONUS [Outside Continental US], as you can imagine, it’s a lot more complicated, because those networks sit with providers outside of the US.”

Bahar, the ex-NSC staffer, put it more bluntly: “If you’re talking on somebody else’s lines, assume they’re listening,” he said. “Unless …. you control everything from end to end and you encrypt it with your home-grown encryption, you have that to assume somebody else is going to hear.”

Global Stakes

The stakes here are even larger than the Chinese government’s ability to snoop on other countries’ cellphone and internet traffic through bugged Huawei components. Huawei is the Chinese Communist Party’s
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in a campaign to remake global communications by introducing new technologies,
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, and capturing a
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than mere assembly-line world for Apple. That campaign, in turn, is part of a
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to trying to
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that Beijing sees as deeply tilted against China – for example, by questioning its claims to Tibet, Taiwan, or the South China Sea. One Hong Kong politician even
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the Huawei sanctions to the19th century Opium Wars.

While the Communist Party has leverage over all Chinese companies, which are legally required to cooperate with security services and, often, to have Party members on their boards, its influence is particularly evident with Huawei.

“Huawei founder Ren Zhengfei started his career in the Chinese military, reportedly serving as director of the People’s Liberation Army (PLA) Information Engineering University, which trains PLA technical specialists in cyber attack and defense,”
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, a cyber expert at the Center for a New American Security. “Huawei’s former chairwoman, Sun Yafang, once worked for the Ministry of State Security, China’s premier intelligence agency, later leveraging those connections to support the company.”

So what happens to Huawei and other Chinese companies, like ZTE, if the US convinces most major economies not to let them bid to build 5G? “They are likely to continue to survive and grow within China regardless,” said
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, also a CNAS senior fellow and author of a
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on Chinese AI strategy. “The Chinese telecommunications market is large and growing rapidly. Preventing these companies from growing internationally would not threaten their solvency in the same way that US semiconductor export bans threatened ZTE.”

(The Trump administration lifted a ban on US manufacturers selling ZTE essential components and has
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tabled any proposal to enact a similar ban on Huawei, which would be far more damaging than the Executive Order now in the works).

“However, restricting or even just delaying growth has major implications for the stock value of these companies, [which are] based on the assumption of major international growth,” Allen said.

Of course, the goal isn’t to hurt Huawei for the sake of hurting it: It’s to protect Western security and economies. “What does winning look like? Winning is having a Western-valued company that actually makes this stuff,” Keiser said. “Huawei was on a trajectory to put everyone out of business” – which would have left even the US with no alternative for 5G.

“In many ways,” said Bahar, “
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is the new gold bullion or the new oil that countries around the world are basically competing for.” Just as the UK and then the US kept the sea lanes open for commerce for over 200 years, he said, we now need to “keep the global sea lanes of data open.”
it's
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