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The 2019 Camden Conference — Cold War Rising?

Huawei, a private Chinese telecom and consumer electronics company, is much in the news these days for four reasons: its role as one of the top global providers of superfast 5G wireless technology, whether the company will agree to use 5G to spy for Chinese authorities, if they stole trade secrets from T-mobile, and whether the company violated U.S.-Iran trade sanctions.

5G, or the fifth generation of wireless technology, is yet another technological game-changer for modern society. When it goes fully commercial in 2020, its devlopers predict it will provide transmission speeds 100 times faster than 4G, allow downloads in a blink and provide ready access to virtual reality. This could mean some Americans will never leave the couch again, but 5G will also allow for widespread use of wireless tech in smart cars, smart homes, artificial intelligence, and a lot more — it will even allow hyper-accurate automated surgery, according to The New York Times, because it will be as fast as human reflexes.

Of course, the implications of getting hacked in the middle of heart surgery or while riding in an automatically driven car are likely to be much more significant than a battery dying on an iPhone or having a credit card account breached.

It’s not that 5G will be easier to hack than 4G, according to The Washington Post, but the payoff for doing so could be big and troubling because so much of modern society will be connected. According to New York Times reporting, 22 billion items will be connected through high-speed wireless by 2024. 5G will be the Internet of Everything before the 2020 elections.

Well, okay, maybe not in Maine. We are still barely out of dial-up. It could be years before the 5G infrastructure is in place to support wireless devices. If you live in New York City or L.A., you could have access by the end of the year.

Huawei matters because it is the world’s number one provider of cell towers and the world’s second largest smartphone provider, according to The Wall Street Journal. Essentially, Huawei can provide 5G cheaper than its competitors can. But, according to The Washington Post, it is not clear if the 2017 Chinese law that impels Chinese companies and citizens to assist in government intelligence investigations applies to Huawei’s devices.

“It is probably, from an ownership perspective, a straightforward private-sector company, but in terms of the control, part of the control lies with the government,” said Yasheng Huang, an MIT professor and international economics and business analyst who specializes in China. Huang was one of a dozen China experts who spoke at the Camden Conference in February.

The potential security threat to the West was amped up last October when Bloomberg Businessweek reported that a spy chip as small as a rice grain had been inserted into motherboards of tech devices during the manufacturing process in China. Bloomberg claimed the spy chip provided the Chinese government with a back door to spy on about 30 major companies, including U.S. government contractors and Apple.

That got a lot of press. This didn’t: Apple and other companies vigorously denied the claim, then tested their motherboards and made another round of denials. At the same time, an independent review found no spy chip hacks.

Ren Zhengfei, the Chinese engineer founder and CEO of Huawei, said there is no way the company would be pressured to spy by the Chinese government since it would ruin their credibility and their global market.

The U.S. banned Huawei 5G tech here at home, anyway, citing national security concerns. Wired magazine reported this week that the U.S. government had a double standard since there are cozy relationships and revolving doors between the U.S. Department of Defense and private companies like Lockheed, Boeing, General Dynamics and Raytheon. And then there is the backdoor spyware U.S. tech companies put into devices to spy on others at the request of the U.S. government (and the reminder that we wouldn’t know anything about it if Ed Snowden hadn’t provided the documents to prove it).

It’s starting to look like a down-and-dirty fight.

Is it too early to call this a cold war over technological influence in the world? China experts at the Camden Conference thought so three weeks ago, but the news is changing daily.

President Trump leaned on the Philippines and pushed European companies and governments to ban Huawei 5G at the end of February. Germany and U.K. representatives shrugged it off, saying their domestic oversight of the technology is increasingly rigorous. The U.S. turned up the heat this week, telling Germany they won’t share American intelligence if Germany keeps Huawei as their provider of 5G.

That is not to say Western powers don’t have legitimate concerns about China. Chinese companies have been buying up Western companies at an increasing rate, thus gaining access to intellectual property. Meanwhile, when foriegn companies set up shop in China, they are routinely required to have a Chinese partner company — a practice that allows China access to trade secrets. China eased up on this practice for foreign car companies last fall, likely in a bid to try to slow the developing trade war with the U.S.

And Huawei has more than a rice-chip-myth problem. Meng Wenzhou, Huawei’s chief financial officer and the daughter of Huawei’s founder, is under house arrest in Canada awaiting decisions about her extradition to the United States for using a front company to violate U.S. trade sanctions against Iran. It has become an international incident and is now tangled up in the U.S.-China trade dispute and in apparent retribution against Canadians in China.

The U.S. focus on Huawei as a poster child for Big Bad Chinese Tech points to the very heart of the trade war the U.S. is marshalling against China, according to Kaiser Kuo, an American and the former international communications director for Baidu, a Chinese tech firm.

“Our bilateral trade issues ... are not really about soybeans or pork or steel or aluminum over-capacity or anything really like that,” said Kuo. “They are, at bottom, very much about technology.”

The U.S. had a monopoly on a lot of tech coming out of Silicon Valley. That has changed in less than 10 years, according to Camden Conference keynote Martin Jacques. Chinese firms like Tencent, Alibaba and Huawei are now on par with the top American technology firms, he said.

“China’s economic rise is going to be a formidable challenge to the United States,” said Jacques. “I think it’s a mistake for America to react in a protectionist way to this. I mean, I’m not saying don’t do any protection whatsoever under any circumstances, but in general the danger of protectionism is that you withdraw.”

“It’s very, very important that American firms are competing in China, because China is becoming such a competitive, ruthlessly competitive, and dynamic economy,” said Jacques. “You have to be part of it to learn from it, because learning is going to be very important in relationship to how we in the West respond to the rise of China.”

In short, we are now inescapably in a global economy.

To bring that all down to ground level, consider the complexities of getting a cup of joe at the drive-through in the not-distant future: A skinny robotic arm (developed in China from technology that may have been stolen from T-Mobile) makes a Starbucks triple vanilla skinny latte (with coffee grown in Yunnan, China) and hands the cup (made in Hunan, China) out the drive-up window (made in Guangzhou, China) when you pull ahead in an electric (made in Shanghai) car whose self-driving technology is directed by Huawei 5G.

Xiè xiè, as they say in Beijing. Thanks.