China slams US for 'unreasonable suppression' of Huawei and other Chinese firms

Customers browse a booth featuring Huawei products at a mall in Beijing, China, on Dec 17, 2018.
Customers browse a booth featuring Huawei products at a mall in Beijing, China, on Dec 17, 2018.PHOTO: NYTIMES

BEIJING - The United States must stop its "unreasonable suppression" of Chinese firms such as Huawei, and provide a fair business environment for them to conduct normal business activities in its market, the Chinese Foreign Ministry has said.

"In the absence of any evidence, the use of state power to discredit and attack specific enterprises is neither fair nor moral," ministry spokesman Geng Shuang said at a regular press briefing on Monday (Jan 28).

Mr Geng was responding to a New York Times article that said Washington has, for the past year, been stealthily pressing its allies to steer clear of networking equipment made by tech giant Huawei as the countries roll out their next-generation 5G network infrastructure, due to security concerns.

While each country is naturally entitled to protect its information security, this "cannot be used as a pretence to damage or strangle legitimate business activity," he said.

Noting the NYT report said there has been no evidence released so far that implicates Huawei in any espionage, Mr Geng said: "We urge the US to stop the unreasonable suppression of Chinese companies, including Huawei, and to provide a fair environment for Chinese and American companies to cooperate with each other."

A Huawei spokesman told The Straits Times that the company categorically denies any suggestion that it poses a threat to national security. 

Such allegations "are politically motivated, not the result of a fact-based, transparent, or equitable decision-making process", he said.

"We call for any evidence instead of tarnishing Huawei's reputation without any proof," he added.

While President Donald Trump has taken a more confrontational approach with China than previous administrations, NYT said Huawei is in the US' crosshairs because of its dominant position in a new global technological arms race to provide the hardware that will power the Internet in the coming decades.

  • What is 5G and why it matters

  •  If the Internet is a network of pipes crisscrossing the globe and enabling data flows, 5G is the supersizing of these pipes.

    A series of technical standards that will speed up the flow of mobile data as much as a thousandfold compared to current 4G technology, 5G Internet is envisioned to be faster than even current home broadband connections, which means a high-definition movie will finish downloading in seconds.

    Experts have said this faster, wireless way to access the Internet will be crucial in realising emerging technologies like autonomous vehicles.

    Besides greater speed, 5G also promises reduced lag, which means augmented and virtual reality - both of which require strong, high-speed connections - will no longer be tethered down by wires.

    And 5G networks will bring far greater network capacity and reliability than current technology - which means more devices can simultaneously access the Internet in the same physical space without hitting a bottleneck - and help usher in an era both of smart cities and smart homes.

    Countries that are trialing or beginning to roll out national 5G networks this year include China, South Korea, the United States and Britain.

    And 5G networks are expected to cover one-third of the world's population by 2025. 

"The administration contends that... whichever country dominates 5G will gain an economic, intelligence and military edge for much of this century," NYT said.

But the lack of evidence against Huawei has prompted some countries to question whether the US campaign is in fact aimed at stopping China from gaining a competitive edge, it added.

Industry experts said Huawei - and China - are likely to lead the world in 5G technology because of massive investments by both Chinese firms and the state.

Upcoming 5G networks can be up to 1,000 times faster than existing 4G networks, and experts said this will be transformative as it underpins other emerging technologies such as virtual reality and autonomous vehicles.

In a report last year titled "China is poised to win the 5G race", Ernst & Young (EY) noted that Beijing had, years ago, made 5G R&D part of the national agenda through a series of policies, with the aim of increasing its global influence as well as for economic gain.

"EY expects China's 5G capital expenditure will amount to RMB1.5 trillion (US$223 billion) between 2019 and 2025," it said.

Huawei has been the most prominent example of China's drive.

Research analyst Parv Sharma of Counterpoint Research estimated Chinese firms today own 10 per cent of the world's core 5G-related patents, with Huawei's portfolio being the largest. Other major players are the US' Qualcomm, Sweden's Ericsson and Finland's Nokia.

"It (Huawei) is one of the few players which has control over the entire ICT value chain," he said. "With active R&D investment and intellectual property rights it is becoming a technology giant."

US intelligence agencies have said implicitly that Huawei's growing tech dominance and Chinese laws that oblige its tech firms to submit to Beijing have fuelled concerns, and a growing number of Western countries have tightened access to their 5G networks.

The US intelligence community spotlighted emerging and disruptive technology, including 5G, in its worldwide threat assessment report last year.

 
 
 

Intelligence officials will appear before the US Senate on Tuesday (Jan 29) to deliver this year's assessment, where they are expected to cite 5G investments by Chinese firms like Huawei as a threat.

China has repeatedly rejected US allegations as unfounded.

In a signed article published in the Sunday Telegraph (Jan 27) and its website, China's ambassador to Britain Liu Xiaoming called on countries like the United Kingdom to see China's rise as an opportunity instead of a threat.

"To make the right choice, the UK needs to pursue independent policy based on its national interests, instead of drifting along with others," he wrote.