House of Huawei review by Josh

This is a pretty solid history of Huawei, covering its rise and the U.S. government's campaign against the company.

The campaign has had two prongs: on the demand side the government has largely banned Huawei from competing in the U.S. market and has tried to pressure other governments to do the same. It claims that the company's hardware has secret backdoors that enable Chinese government spying and so is a national security risk. On the supply side the U.S. has placed embargoes on semiconductors (and, more significantly, pressured companies in Taiwan and South Korea to do the same).

Both of these efforts appear to be failing. Huawei remains by far the world's largest global telecom equipment provider. The chip embargo seems to have spurred accelerated development of the Chinese domestic semiconductor industry.

But why was the U.S. attacking Huawei in the first place? Aside from the aforementioned national security risk a number of reasons have been proffered: the company sells equipment to sanctioned regimes (notably Iran), it has worked with the Chinese government to develop technologies of government control and oppression, and it probably copied U.S. technologies in it's early days.

The Trump administration has given no evidence of the alleged national security risk. It's also not entirely clear that the type of spying the government alleges is even possible with modern encryption software. It seems likely that the administration figures if Huawei were a U.S. company they would pressure it to build spyware into it's equipment so the Chinese government probably does the same. While this is hardly an airtight argument, it's probably accurate enough. The Trump administration's mistake was in thinking that countries trust the U.S. any more than they trust China, much less that they would be wiling to pay billions of dollars more for equipment to demonstrate that trust.

It seems likely that Huawei's equipment is used for a range of spying activities, but it's by governments for spying on their own citizens rather than the by China for spying on other governments. It's certainly true that Huawei is a threat to U.S. national interests insofar as it would be in the national interest to maintain global hegemony over high tech industry. But that's not an interest that other nations have much interest in preserving. Developing countries in particular would seem to have little incentive to preserve a global system that largely gave them the shaft. They have, unsurprisingly, completely ignored the U.S. boycott efforts.

There is one way that the rich world could get the rest of the world to stop by Huawei equipment, that is by producing better equipment at lower prices. That seems unlikely to happen though. It seems more likely to me that Huawei will continue to extend its lead over western competitors. Protectionist measure might help the industry survive and even prosper in the short run but eventually it will fall behind technically as it fails to keep pace with Chinese R&D spending - essentially the same situation the Soviet Union found itself in 40 years ago.