In this regard, the critical question is not whether to pursue some degree of decoupling but how and to what extent. Although interdependence was once considered a check against conflict, the risks that such entanglements could be exploited, leveraged coercively, or have evidently exacerbated frictions in the U.S.-China relationship. But such a transition toward a perhaps more stable equilibrium will take time and require a careful weighing of viable alternatives.
Overall, the globalized and collaborative of U.S. innovation ecosystems has benefited the United States and China alike, despite the exploitation and asymmetries in those benefits. In some respects, the Trump administration’s approach to China has seemingly demonstrated the right diagnosis but at times the wrong prescription. So too, while the leverage that these latest measures may provide could be praised as a savvy approach to negotiating with a regime that seems to respond only to power and forceful pushback, such tactical victories on trade—or in undermining a so-called national champion that has apparently benefited from unfair advantages—should not come at the expense of the sustainability of long-term U.S. strategy.
If the Trump administration intends the ban on Huawei through the Entity List to be tantamount to a “death penalty,” then these latest measures may also backfire. It is still unclear whether the listing, with which a growing number of American and European companies are , will become an outright restriction or if licenses will continue to be granted for some U.S. companies to continue selling to Huawei in the long term. (So far, a has offered a limited reprieve through August, including to allow updates and patches for current networks.) Regardless, those who expect this to mean the end of Huawei may find themselves disappointed.
Despite its obvious vulnerabilities, Huawei’s capabilities—and the determination of the Chinese government to support it as a national champion—should not be underestimated. Ren Zhengfei “We have sacrificed ourselves and our families…for the sake of a dream, that we will stand on top of the world. For the sake of this dream, conflict with the United States is sooner or later inevitable.” Huawei could confront grave damage but for just such a contingency, pursuing its own alternative components through its subsidiary HiSilicon. There are whether Huawei could adjust to a worst-case scenario. Nonetheless, the Chinese government’s active investments in chipmakers are starting to pay off, particularly . Already, these latest pressures are catalyzing a redoubling of China’s initiatives to enable so-called and advance indigenous innovation, particularly in emerging and disruptive technologies. An unintended consequence might be reinforcing Beijing’s determination to stay the course, while risking weakening U.S. companies that now risk losing business or facing retaliation.
Today, 5G is not a race in which Huawei has all but triumphed. Huawei’s initial statement in response to these measures , “Huawei is the unparalleled leader in 5G.” Although this claim may make for great marketing—and a persuasive narrative for countries concerned that excluding it would increase the cost and slow the pace of their 5G deployment—this assessment is misleading and not entirely accurate. Huawei is still one among a number of contenders, including Nokia, Samsung, Ericsson, and Qualcomm, among others. To be sure, Huawei does have some unique advantages in 5G, such as its apparent strength as a systems integrator, and the company constitutes a major contender across nearly all of the critical components for 5G. However, such advantages are not unassailable in an industry that is continuing to evolve as 5G takes shape.
Going forward, the United States must not only play defense but also promote positive alternatives. This is perhaps the graver threat that Huawei poses: undermining fair and healthy competition thorough its desire to dominate 5G in ways that may be damaging to the vitality the overall ecosystem. Huawei has often succeeded in capturing market share based on its ability to undercut competitors in terms of price, likely enabled by Chinese government subsidies and funding that remain opaque. Presently, Huawei commands a significant proportion of the current global telecommunications market, nearly 30 percent to date . Concerningly, Huawei the choice of its networks in ways that may undermine optionality and interoperability for nations that had opted for its 4G,.
The goal for future U.S. initiatives on 5G should be promoting healthy competition. The continued development and deployment of 5G will be better served by a greater diversity of options among vendors and rebalancing of supply chains. The United States should be more proactive in 5G through redoubling initiatives to advance innovation. To compete, the U.S. government should increase and sustain support for research and development, whether through support and funding or incentives, such as tax breaks, for companies to redouble investments and universities to increase long-term research. At the same time, America cannot lead in 5G alone, and U.S. policy should prioritize closer coordination with allies and partners on security and innovation alike. Otherwise, whatever steps are taken against Huawei, China may still lead—perhaps dominate—the future of 5G.
Overall, the globalized and collaborative of U.S. innovation ecosystems has benefited the United States and China alike, despite the exploitation and asymmetries in those benefits. In some respects, the Trump administration’s approach to China has seemingly demonstrated the right diagnosis but at times the wrong prescription. So too, while the leverage that these latest measures may provide could be praised as a savvy approach to negotiating with a regime that seems to respond only to power and forceful pushback, such tactical victories on trade—or in undermining a so-called national champion that has apparently benefited from unfair advantages—should not come at the expense of the sustainability of long-term U.S. strategy.
If the Trump administration intends the ban on Huawei through the Entity List to be tantamount to a “death penalty,” then these latest measures may also backfire. It is still unclear whether the listing, with which a growing number of American and European companies are , will become an outright restriction or if licenses will continue to be granted for some U.S. companies to continue selling to Huawei in the long term. (So far, a has offered a limited reprieve through August, including to allow updates and patches for current networks.) Regardless, those who expect this to mean the end of Huawei may find themselves disappointed.
Despite its obvious vulnerabilities, Huawei’s capabilities—and the determination of the Chinese government to support it as a national champion—should not be underestimated. Ren Zhengfei “We have sacrificed ourselves and our families…for the sake of a dream, that we will stand on top of the world. For the sake of this dream, conflict with the United States is sooner or later inevitable.” Huawei could confront grave damage but for just such a contingency, pursuing its own alternative components through its subsidiary HiSilicon. There are whether Huawei could adjust to a worst-case scenario. Nonetheless, the Chinese government’s active investments in chipmakers are starting to pay off, particularly . Already, these latest pressures are catalyzing a redoubling of China’s initiatives to enable so-called and advance indigenous innovation, particularly in emerging and disruptive technologies. An unintended consequence might be reinforcing Beijing’s determination to stay the course, while risking weakening U.S. companies that now risk losing business or facing retaliation.
Today, 5G is not a race in which Huawei has all but triumphed. Huawei’s initial statement in response to these measures , “Huawei is the unparalleled leader in 5G.” Although this claim may make for great marketing—and a persuasive narrative for countries concerned that excluding it would increase the cost and slow the pace of their 5G deployment—this assessment is misleading and not entirely accurate. Huawei is still one among a number of contenders, including Nokia, Samsung, Ericsson, and Qualcomm, among others. To be sure, Huawei does have some unique advantages in 5G, such as its apparent strength as a systems integrator, and the company constitutes a major contender across nearly all of the critical components for 5G. However, such advantages are not unassailable in an industry that is continuing to evolve as 5G takes shape.
Going forward, the United States must not only play defense but also promote positive alternatives. This is perhaps the graver threat that Huawei poses: undermining fair and healthy competition thorough its desire to dominate 5G in ways that may be damaging to the vitality the overall ecosystem. Huawei has often succeeded in capturing market share based on its ability to undercut competitors in terms of price, likely enabled by Chinese government subsidies and funding that remain opaque. Presently, Huawei commands a significant proportion of the current global telecommunications market, nearly 30 percent to date . Concerningly, Huawei the choice of its networks in ways that may undermine optionality and interoperability for nations that had opted for its 4G,.
The goal for future U.S. initiatives on 5G should be promoting healthy competition. The continued development and deployment of 5G will be better served by a greater diversity of options among vendors and rebalancing of supply chains. The United States should be more proactive in 5G through redoubling initiatives to advance innovation. To compete, the U.S. government should increase and sustain support for research and development, whether through support and funding or incentives, such as tax breaks, for companies to redouble investments and universities to increase long-term research. At the same time, America cannot lead in 5G alone, and U.S. policy should prioritize closer coordination with allies and partners on security and innovation alike. Otherwise, whatever steps are taken against Huawei, China may still lead—perhaps dominate—the future of 5G.
