21Vianet 2600Hz 3Com 3GPP 3Leaf 4G 4G licensing 5G Africa Alcatel Shanghai Bell Alcatel-Lucent Alibaba Android antiitrust Apple APT Satellite Arete AT&T auction backbone Baidu Bain bandwidth base station Battery broadband cable CBN CCP censorship Cfius China China brands China FTTH China hi-tech China market China media China Mobile China Mobile Hong Kong China Science China Telecom China Unicom chips Ciena Cisco civil society CNNIC Communist Party convergence copyright CSL cybersecurity Datang drones Egypt Elop Ericsson EU Facebook FDD LTE FDD-LTE feature phones Fiberhome FLAG forecasts Foxconn FTZ Galaxy S3 Google GSMA GTI handset handsets Hisilicon HKBN HKIX HKT HKTV Hong Kong HTC Huawei Hugh Bradlow Hutchison India Infinera Innovation Intel internet investment iOS iPad iPad 2 iPhone IPv6 ITU Japan KDDI KT labour shortage Leadcore low-cost smartphone LTE MAC MAE Mandiant market access Mediatek Meego Miao Wei Microsoft MIIT mobile broadband mobile cloud mobile data mobile security mobile spam mobile TV mobile web Motorola music MVNO MWC national security NDRC New Postcom Nokia Nokia Siemens Nortel NSA NTT DoCoMo OTT Pacnet Panasonic patents PCCW piracy PLA politics Potevio price war private investment Project Loon Qualcomm quantum Reach regulation Reliance Communications Ren Zhengfei Renesys RIM roaming Samsung sanctions Scania Schindler security shanzhai Sharp SKT Skype smartphones Snowden software Sony Ericsson spectrum Spreadtrum standards startups subsea cables subsidies supply chain Symbian tablets Tata Communications TCL TD LTE TD-LTE TD-SCDMA Telstra Twitter urban environment USA US-China vendor financing Vitargent Vodafone New Zealand WAC WCIT Web 2.0 web freedom WeChat WhatsApp Wi-Fi Wikileaks Wimax Windows Mobile WIPO WTO Xi Guohua Xiaolingtong Xinjiang Xoom Youku YTL ZTE
Main | 'A billion devices': Huawei eyes the prize with polar codes »

The Huawei shoe drops

Finally, the Huawei shoe has dropped.

The move by US authorities against Huawei is no surprise to those who’ve been following the saga of Washington vs. the Chinese vendors.

This particular episode goes back to 2016 when the Commerce Department subpoenaed Huawei’s US office over alleged illicit shipments to Iran, Syria, Cuba, North Korea and Sudan.

Where that went we don't know, but we do know from Reuters that as early as April this year the Justice Department was running a probe out of the US attorney’s office in Brooklyn.

We also have a ZTE internal document (in Chinese, posted here by the Commerce Department) which  praises a company, F7, as being better at evading sanctions laws.

Because the document tells us F7 was a large company that had been the subject of a Congress report and had been in a partnership with Symantec, we can be highly certain it was Huawei.

That document was one of a cache of files confiscated from a ZTE laptop that ensured that the feds had a watertight case.

But for the Huawei case, although it's been assumed to be pending for some time, we know none of the detail, including what charges Meng Wanzhou faces.

She is reportedly due to appear at an extradition hearing on Friday, six days after she was detained.

But we should ask why Meng and why now?

First it is hard not to miss the timing, just as the US and China had reached a ceasefire in their trade war - literally on the same day.

Whether it is to ratchet up pressure, to indict Beijing as a bad actor, or just to provoke, we don’t know, although the revelation that hawkish John Bolton was close to the decision suggests it might be all of those and more.

Even more inflammatory is the individual. Meng (also known as Sabrina and previously Cathy) is the elder daughter of Huawei founder Ren Zhengfei, one of China’s most storied business leaders.

Her arrest at an airport gate is analogous to the daughter of Gates or Bezos being detained in China. It certainly has China’s attention.

But the really big change is that US attorneys are now going after individuals, not companies. Law-breaking executives are putting themselves at personal risk.

For the US and other western nations, the issue in play isn’t sanctions but the rules of commerce and getting Chinese to abide by them.

A widely-held view among western pundits is that after the on-again, off-again penalties against ZTE, the US needs a more robust approach to staunching IP theft and forced technology transfer.

By contrast, the Chinese media could have been discussing a completely different case.

You won’t find any mention of ZTE’s guilt or F7 or industrial espionage. 

For the revved-up Chinese public this is aimed at “halting the rise of China.”

In one typical response, a columnist in the nationalist Chinese language Global Times accused the US of trying to achieve by “despicable hooligan methods” that which it could not achieve in the market.

This trade war has suddenly warmed up. It could go anywhere, though probably not anywhere good.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>