Huawei’s recent trials and tribulations in the West and the retaliatory actions of
China against
Canada have shocked many people. It is natural to assume that the detentions and restrictions on Huawei’s use in core
infrastructure are due to the rupture in US-China
trade relations. However, these actions can best be understood through the prism of two clashing meta-trends: hi-
tech’s strategic importance across the realms of
defence, commerce and social organisation under the leadership of the
United States, and China’s emergence as a rising
military power under the auspices of the
Communist Party. Technology and telecommunications have important characteristics which render them highly strategic, as compared to traditional industries such as steel, manufacturing or petrochemicals. While these basic industries have historically been fundamental to a nation’s economic development and military might, their strategic importance has diminished as their supply chains have become easily replaceable.
A steel company can select from a range of coal and iron suppliers producing more or less the same commodity globally. The same can be said for an automobile company that needs to source steel. Cutting-edge technology products, on the other hand, rely on a highly specialised group of suppliers which design customised products and services.
In addition to having vulnerable supply chains, technology and telecommunications systems bear a higher cost from any sort of disruption as they are typically linked in a network, such that a problem occurring in one part of the chain jeopardises the entire network.
Meanwhile, governments, militaries,
companies and individuals are increasingly reliant on technology, which is embedded into every facet of our work and lives. The rise of
social media, cyber hacking,
artificial intelligence and big data, and the roll-out of the
internet of things with
5G all demonstrate the critical nature of our technology and telecoms systems.
Thanks to its world-class
research institutes and vibrant
start-up ecosystem, the US has fostered virtually every domain of technology, including semi-conductors, supercomputers, enterprise software and advanced telecommunications. The US has also spearheaded the setting of standards governing connectivity between technological layers and devices – including the internet itself – for commercial and other uses. The ability to set protocols means commercial benefits for those companies that are early to adopt and promote the technology, often on a licensing basis. Equally important, and pertinent to geopolitics, the US plays a key role in limiting access to key technologies by regimes not in favour, through various sanctions and export-control regimes.
