With Huawei’s crisis comes opportunity

By Wang Cong Source:Global Times Published: 2018/12/19 20:18:41

Company should take pushback as chance to showcase 5G superiority


Huawei global headquarters in Shenzhen, South China's Guangdong Province on December 18. Photo: VCG



It is often pointed out that the Chinese word for "crisis," weiji, shares a character with jihui, meaning "opportunity." This similarity has been interpreted, perhaps inaccurately, as something along the lines of "with crisis also comes opportunity," and foreign dignitaries, from former US President John F. Kennedy to former US Secretary of State Condoleezza Rice, have employed the trope in their speeches. If there is any truth to the maxim, embattled Chinese telecom giant Huawei Technologies might soon face some opportunity.

Considering all the troubles Huawei has encountered in recent months, from foreign restrictions on its business operations to the arrest of its top executive in Canada, it is safe to say that the Chinese company, which has become a global leader in telecom technology, particularly in 5G network development, is facing a serious crisis. But this dark period, which seems to only get worse with foreign pressure continuing to mount, could become a critical opportunity for Huawei to pave a long-term, sustainable path ahead. This opportunity was presented in the US and Canada's handling of the case surrounding Meng Wanzhou, chief financial officer of Huawei.

Meng, who is also the daughter of Huawei founder Ren Zhengfei and reportedly slated to take charge of the company, was arrested in Canada on December 1 at the request of the US, which claims that the company had violated its unilateral sanctions on Iran. She could, if extradited to the US and found guilty, face up to 30 years in prison.

Admittedly, the notion that this could be an opportunity for Huawei might sound a bit far-fetched when the company is facing what has been described as a life-or-death situation. Apart from Meng's case, there is an increasing number of countries reportedly considering halting the purchase of Huawei telecom equipment and its participation in 5G rollout.

Following actions by the US, Australia and New Zealand, other countries, including Japan and the Czech Republic, are also reportedly considering bans on purchases of Huawei's equipment and participation in their 5G development, citing national security concerns - an unsubstantiated claim long pushed by the US and the so-called "Five Eyes" countries.

This has led some to believe that Huawei's rapid rise in technological capability could come to an end. Indeed, such concerted, robust actions from powerful governments have the ability to sabotage foreign regimes in countries small or large, not to mention a private company like Huawei.

But by arresting a top Huawei executive - an unprecedented move even for the US, which has brought numerous cases against multinational corporations over its unilateral sanctions against Iran and frequently engages in what has become known as long-arm jurisdiction - the US and its allies laid bare their ill intentions to destroy a company and its employees just to preserve their technological dominance.

More importantly, this also highlights the weakness of their long-sought case against Huawei on national security charges.

The US and its allies have for years been peddling accusations that Huawei, a private company, has been working for the Chinese government in spying on them. But they have failed to present any concrete evidence, as demanded repeatedly by Huawei,  instead opting for vague words such as "threats" and "concerns."

Opportunity

Meng's arrest has attracted attention from around the world and this offers a crucial opportunity for Huawei to address foreign criticism and "concerns" once and for all and come clean. Huawei could also use this opportunity to evaluate its overseas strategies and make necessary adjustments.

Moreover, the arrest of Meng by Canada has also sparked widespread outrage from both the Chinese government and the public and rallied nationwide support for not just Meng but Huawei, which many in China believe to be unfairly treated by the US government and its allies. The outrage is palpable in all corners of Chinese society - on social media and in personal conversations.

Chinese officials have urged Canada to release Meng and threatened "dire consequences" for Canada if it decides to extradite Meng to the US. Consumers have called for the boycott of US and Canadian products such as iPhones and Canada Goose winter jackets. Some Chinese companies have offered incentives to employees who choose to buy Huawei products.

Such widespread support, particularly from the Chinese public, might not have been as strong if it was not for the arrest of Meng, who despite her high professional status, has received overwhelming sympathy and even national hero status among some Chinese citizens. This kind of support, rare for a company, could greatly help Huawei through the period.

In addition, the strong response from Chinese officials and the public should also serve as a warning shot for other countries that are reportedly considering similar restrictive moves to push Huawei out of their markets without any legal justification.

Many of these countries have a huge trade volume with China and they may now, after witnessing Canada's situation, think twice before taking unfair actions against Huawei.

These countries may also feel the chill after US President Donald Trump suggested in a recent interview that he could intervene in Meng's case if Chinese and US officials can reach a trade deal, proving that Canada was nothing but a pawn in the US' trade war with China.

Above all, the unprecedented criticism and pushback against Huawei from the US and its allies also provides Huawei a moment to showcase its capabilities in 5G. For Huawei to survive, the most important thing is to show its irreplaceable role in the global telecom supply chain and the rollout of 5G.While the US, Australia and New Zealand have banned Huawei, the Chinese company has signed contracts in 5G with dozens of other countries and companies. Huawei is also well-positioned to lead the 5G race.

According to Paul Triolo, the head of global tech policy at risk consultancy Eurasia Group, Huawei is the only company in the world at the moment that can produce all the elements of a 5G network and assemble them together at "scale and cost." Huawei should realize that the fight is about 5G, and if it can focus on its real strengths and help China and these countries win the 5G race, it will prevail in the end.



Posted in: ECONOMY,INSIGHT

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