US probe of Chinese vendors height of hypocrisy

This article was authored by Tony Poulos, and was originally posted on telecomasia.net.

Paranoia reached new heights with news out that a US government committee has launched a full investigation into the potential security threat of Chinese telecom equipment companies operating in the United States.

The House permanent select committee on intelligence (HPSCI) said in a statement that a preliminary 10-month review of Huawei and other Chinese vendors “suggests that the threat to the supply chain constitutes a rising national security concern of the highest priority.”

Using the sort of ‘redneck’ rhetoric only previously found in Wikileaks dispatches, the Chairman of the committee and apparent master of diplomacy and Lone Ranger descendant, Mike Rogers, was quoted as saying, “the fact that our critical infrastructure could be used against us is of serious concern. We are looking at the overall infrastructure threat and Huawei happens to be the 800-pound gorilla in the room, but there are other companies that will be included in the investigation as well.”

Goodness me, next we’ll be hearing that Chinese companies have been stealing US technology and repackaging it as their own, but that’s hardly likely because there hasn’t been much new technology coming out of the USA of late. In an earlier time, Rogers would, no doubt, have been a rabid McCarthyist. His committee’s activities fly in the face of what the USA has espoused for centuries as the bastion of capitalism and free trade. He must be really sore that a once Communist state has out-capitalized the USA. One can only assume that the anti-Chinese lobbyists have been very active in Washington of late and that planting ‘security fears’ in the minds of the weak-willed will stave off the inevitable.

For those old enough to remember, similar ‘patriotic’ fervour was unleashed when the Japanese started making inroads into the US TV and electronics markets in the 60s, the Korean car makers in the 90s, and more lately, Indian systems integrators (or ‘body shops’ as the were affectionately referred) to and the invasion of Mexican farm labour. Those battles were all lost.

US manufacturers realized early that they could produce their goods in China at a much lower cost than in the USA and we can now see the result on the US economy, balance of payments and unemployment rates. Why isn’t Mr Rogers singling out those players who have profited handsomely from the ‘free trade’ policies of his own government?

Maybe he should also take a look at how Chinese business acumen is fostered. No MBAs pumped out by big name colleges there. How can those budding CEOs stateside stand out if they are all taught the same principles and referred to the same out-dated case studies. In China one is brought up on the thoughts of Confucius and the bible of business is The Art of War.

Sure, Chinese government still plays a role in how Chinese business operates. You’ll notice in the telecom sector that everything comes in threes, at least. Three big operators, (China Telecom, China Mobile & China Unicom); three big suppliers (Huawei, ZTE & AsiaInfo Linkage); and even three types of 4G technology (FDD-LTE, TDD-LTE and TD-SCDMA). This model almost guarantees competition and innovation and is sustainable because the market is so large, both in numbers and geography.

It seems the Chinese are also investing heavily in innovation, hiring some of the world’s best engineers to design the new technologies. They are very active with international standards activities and have attracted big names to their international boards of directors and management teams.

They are, in effect, emulating what their main competitors did years before and they are out-manoeuvring them as a result. The new mantra is cultural integration, which may actually be a double-edged sword if those unproductive Western habits start to take hold.

If the fear of breaches in national security has grounds then twenty or thirty other countries, whose operators have Huawei equipment installed, must be trembling. If the USA has the technology to read a newspaper on Earth from a satellite in space (or so I was brought up to believe), then surely it has the ability to secure its own systems from unwelcome eyes. Of course, these days, you don’t even need a network to snoop. As Wikileaks discovered, you just have to wait for someone to snoop for you.

Regardless, this security smoke-screen of restrictions targeting Huawei is the height of hypocrisy in light of all that free trade baloney being touted by the US. Maybe China should look into the security implications of providing toy guns to Walmart as they may encourage use of the real things in future.

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Categories: Government Regulations · Telecom Equipment