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Abacus | China’s wrong, the US can kill off Huawei. But here’s why it won’t
- Chinese claims that Huawei can prosper without the US are given the lie by Beijing’s past attempts to foster innovation
- But it’s in Trump’s interests to reach a deal
Reading Time:4 minutes
Why you can trust SCMP
IF STRICTLY ENFORCED and sustained, the United States government’s ban on sales of US technologies to Huawei will drive the Chinese telecoms equipment giant out of business.
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And if extended to a broader range of Chinese companies, as rumoured, Washington’s export controls will do great economic damage not just to China, but also to US and international businesses. In the long run, they could even split the world into two incompatible – and hostile – technological blocs, with potentially catastrophic effects for future international relations.
But the US-China tech cold war has not yet become an economic ice age, and there are still good reasons to believe these troubling scenarios can be avoided.
However, the risks are great. Last week, the mainland media was full of strident nationalistic rhetoric about how Huawei can prosper despite the US ban, and how China will develop indigenous substitutes for US technologies to its own economic advantage. Neither assertion stands up to examination.
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Huawei’s network equipment and smartphones are heavily reliant on US components, notably semiconductors, and software. Some of these components cannot easily be replaced by non-US parts. And where others can, for example by Korean or Japanese products, the substitutes are typically manufactured using US intellectual property.
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