Cyber security claims just protectionism

Source:Global Times Published: 2013-5-14 23:08:01

Illustration: Liu Rui/GT
Illustration: Liu Rui/GT 

The founder of China's telecommunications equipment-maker Huawei, Ren Zhengfei, gave an interview with some local reporters in New Zealand recently. It's the first time Ren has spoken to media over the past 26 years. Ren criticized the US accusations on Huawei over cyber security issues, saying the company "has no connection to the cyber security issues the US has encountered."

Chinese telecommunications enterprises like Huawei and ZTE in recent years have been suppressed in the US market on cyber security grounds. Authorities such as the US Congress, House Intelligence Committee and International Trade Commission constantly targeted these Chinese companies in a cyber espionage review process.

The latest move is a funding law signed in late March by US President Barack Obama, preventing agencies like NASA and Justice and Commerce Departments from buying information technology systems from Chinese enterprises on their own.

In fact, there's been lots of thunder but little rain in the US passing such a spending law. Few Chinese major telecommunications enterprises make profits from governmental purchase of the US.

Take Huawei, where its exports to the US are mainly for civil use. Ren emphasized in his first interview that Huawei "has never sold any key equipment to major US carriers" nor any equipment to any US government agencies.

For a long time, the US has kept pointing its finger at cyber attacks from China, and using them as an excuse to block the development of Chinese telecommunications companies in the US.

But so far, it has failed to present adequate evidence for its accusations. The essence of the US actions is "protectionism" shielded under the excuse of improving cyber security.

The US and European countries historically cried up trade liberalization. However, with a declining comparative advantage in technological trade, they have abandoned previously favored trade liberalization by degrees, and cling to "national security."

It's not difficult to find the reason for the US suppression of Chinese enterprises. The burgeoning Chinese telecommunications enterprises pose an increasing challenge to its US counterparts, which makes the US choose to shield its domestic industry whose comparative advantage and core competitiveness are waning confronted to rising challengers.

Mounting US concern about Chinese cyber attacks leads to piling aggressive restrictions on Chinese telecommunications enterprises. China doesn't lack countermeasures.

From a macroeconomic perspective, the US has managed to walk out of the financial crisis with difficulty thanks to rounds of policy regulation and China's concessions on the exchange rate issue. But it's still very weak after a serious illness. Today's US needs China is much more than what China needs the US.

What the US has done to Chinese telecommunications enterprises should receive reciprocal measures or much more severe ones from the Chinese side.

It's obvious that neither could be endured by the US. If China bans governmental agencies from purchasing US telecommunications equipment, there will be a big blow to the US industry, since US technology and equipment are key elements of Chinese governmental networks.

Currently, the US Congress is considering legislating cyber security, and is discussing the government budget for 2014.

Increasing cyber security should be a technological problem rather than a political one. At the technology level, the US could strengthen the real-time monitoring over program execution and reinforce ID authentication over operators.

In an era when enterprises are further internationalized, improving cyber security is not an adequate excuse to defend the US national restrictions on suppliers of information technology systems.

The more the US does to block Chinese companies, the more it shows its fear of the emerging Chinese telecommunications industry.   

The article was compiled by Global Times reporter Yu Jincui based on an interview with Zhao Yongsheng, vice chairman of the Paris-based China-France Association of Lawyers and Economists and a visiting scholar with the Institute of European Studies at the Chinese Academy of Social Sciences.

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