US-China trade war: Prolonged ban on Huawei could split tech world

The Huawei logo pictured in central Warsaw, Poland, on June 17, 2019. PHOTO: REUTERS

After last Saturday's meeting between United States President Donald Trump and his Chinese counterpart Xi Jinping, Mr Trump told a news conference that American companies could resume doing business with Chinese telecommunications equipment giant Huawei.

However, it is unclear how this will be done as the Shenzhen-based firm still remains on the US Commerce Department's Entity List, which effectively bans American companies from selling products and services to it.

The Straits Times' tech editor Irene Tham said at the annual Straits Times Global Briefing yesterday that a prolonged US ban on Huawei could lead to a splintered tech world with two sets of technologies in two economic camps.

"The downside is more than just about carrying two different mobile phones in two different places," she warned. Having two sets of networks and technologies that do not interoperate will mean a duplication of resources, which is not productive for the world, she said.

OCBC economist Selena Ling noted that the Huawei ban looks more like a bargaining chip used by Mr Trump to make a deal. If Huawei is a threat to national security, there is no way it would be included in the trade talks, she argued.

That said, Associate Professor Li Mingjiang of the S. Rajaratnam School of International Studies pointed out that there has been genuine concern among US policymakers and lawmakers on Huawei being a security threat as early as 2011, way before both presidents came to power.

This reflects the deep distrust that the Americans have regarding State and business relations in China, he said. "It is a time for China to face up to these challenges and think about its development model."

Nonetheless, it looks like China is prepared for a prolonged "struggle" with the US, but yet it wants to avoid an open split, he observed.

And in this struggle, it is ultimately about whether the US or China is No. 1 in the world. "The last major thing that China needs to move to No. 1 is technology," he noted, adding that supremacy in technology will help China boost its economy and military. "This is the major piece missing in China's power index, and the Americans understand that."

If things continue to deteriorate between the two powers on the technology front, the world may have to live with two systems, he added.

The Straits Times Global Briefing was sponsored by OCBC Premier Banking.

Chong Koh Ping

Correction note: This article has been edited for clarity.

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A version of this article appeared in the print edition of The Straits Times on July 04, 2019, with the headline US-China trade war: Prolonged ban on Huawei could split tech world. Subscribe