New World Order – Huawei-Centric China and Divisive India!

World’s Most Populous Countries in Toxic Game of Oneupmanship!

Beijing appears to be keen on seeing a Huawei-centric China while Prime Minister Narendra Modi wants a divisive Hindu India.

In essence, the world’s top two most populated countries, China and India, are redefining a new world order with oneupmanship as the nucleus. They want to be calling the shots because they have the world’s largest consumer markets, including untapped sectors, even as the advanced West is reaching saturation point.

American businesses, as well as those from the developed First World, do have a lot at stake in the China–U.S. trade saga which appears to have gathered a new dimension with the blacklisting of Huawei by President Donald Trump yesterday.

U.S. tariffs and tit-for-tat measures from China may mean Americans will have to spend more on their purchases. They ought not to be carping given that they have enjoyed bargain prices for most goods in the U.S. so far.

  • For instance, the price of oil/gas is cheaper in the U.S. than even in countries with stark poverty, including China and India.

With an earning power that is much higher than in most of the rest of the world they can afford to pay more and must come out of their protective cocoons and help stop the continuing rise of a hegemonic China with big territorial ambitions, trampling on all smaller neighbours.

Risking Slowdown of Economy to Defend Huawei

Coming back to the rift between China and the U.S. over Huawei, an inevitable outcome will be a move to self-sufficiency for the communist power.

Since China is risking a massive slowdown in its economy by rushing to the defence of Huawei, it may not be wrong to say there is more to it than meets the eye.

As I had argued in a post here on December 7 last year, “western fears about Beijing strengthening its spy network through use of Huawei’s equipment in 5G communications networks are not unfounded.”

The fact that China reacted with anger to the arrest of Huawei CFO Meng Wanzhou last year in Canada as well as its reactions to the blacklisting of the networking company, only offers grist to the fears. Huawei’s founder (Ren Zhengfei) is, after all, an ex-People’s Liberation Army officer and China’s manoeuvrings in the past had only invited global suspicions, not trust.

We may not have heard the last in the ongoing tussle as aggressive posturing can be expected to end up in compromises given the pressure American businesses can exert on Mr Trump.

Huawei’s BCP

Reports indicate that Huawei had been working on manufacturing components and technology needed for the 5G infrastructure that it is selling globally as a frontrunner.

Huawei does seem to have a Business Continuity Plan, with reports about having initiated plans to make its own chipsets (so it can stop buying them from the likes of Intel, Qualcomm and Broadcom). Over the course of the last year, it may also have been accumulating stockpiles from American companies of network/server components for its 5G technology.

What amuses me, though, is Huawei’s objection to what it calls unilateral actions in the name of national security. This is not its call as every country has to take adequate steps to ensure that its security is not compromised.

Next, it asserts that any curbs on Huawei “will not make the US more secure or stronger; instead, this will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the interests of US companies and consumers.”

There is some truth to it, as the U.S. does not have companies manufacturing 5G gear. It will have to rely on Huawei’s competitors such as Nokia and Ericsson, and this may translate to higher costs. That is a problem for the U.S. to solve, not for Huawei to use as leverage.

G Joslin Vethakumar

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