- The history of the US’ challenge to British communications hegemony in the early 20th century provides insightful tools when analysing the US’ current stance towards Huawei.
- US telecom companies have failed in their attempts to break into the 5G market. Worse still, there is little prospect around the credits of alternative technologies, as Ericsson and Nokia fail to compete with Huawei’s competitive pricing.
- The UK’s decision to phase out Huawei equipment from its networks by 2027 will significantly hamper the UK government’s ambition to develop an artificial intelligence industry in the future.
Discussions so far of US sanction on Huawei have been framed mainly from the angle of either trade war or technology race. Although many commentators are quick to invoke the Cold War analogy, few have paid attention to the historical connection between network control and geopolitical rivalry. The debate will go on regarding the extent to which contemporary China resembles USSR. What could be equally instructive though, is looking into an earlier historical episode at the turn of the twentieth century, when the US was a challenger, rather than the hegemon, to the global geopolitical order that Britain had been presiding over for more than two hundred years.
In her recent book entitled Reluctant Power, media historian Rita Zajácz documents how early twentieth-century American policymakers sought to advance the global position of the United States by wrestling with British dominance in communication infrastructure. Since Britain at that time was perceived as having control over both the high seas and the global cable network under the sea, the US circumvented such control by, on the one hand, adopting radiotelegraphy as an alternative technology, and on the other hand, using policy and legislation to harness the behaviour of multinational corporations (MNC). Two things become immediately clear through this historical account. First, foreign policy is closely linked with communication policy aimed at regulating networks, which in turn is crucial to global leadership. Second, the national identity and loyalty of MNCs was under scrutiny from the beginning, especially for sectors deemed as having strategic importance to national security. American policy makers restricted the expansion of British Marconi in the first decade of twentieth century through licensing and foreign ownership regulations. Then in the following two decades they negotiated with the expansionist corporate strategies of homegrown RCA to preserve the independence of American radio. These insights help us to better comprehend the current US stance toward Huawei that goes beyond addressing trade deficit or technology inferiority.
Zajácz defines network control as “decision-making ability regarding territory, capital, and technology through which one party secures an uninterrupted flow of information while denying the same to its opponent.” (p.29). Unlike some of the previous research on communication and empire that define network broadly (Cf. Innis, 1950; Winseck & Pike, 2007; Castells, 2009), Zajácz has a sharper focus on network as communication infrastructure, which she believes are important means, rather than simply the outcome, of global geopolitical rivalry. The American ascendancy in political, economic and military power was inseparable from the country’s quest for dominance in communication networks in two important ways. From a political economy perspective, information infrastructure is fundamental to the functioning of market economy in facilitating the circulation of goods, services and labour. From an international relation point of view, being able to deny “uninterrupted flow of information’ to opponents secures one’s strategic advantage during times of war and peace. In fact, sea power doctrine, which asserts that the key to winning a decisive conflict with a strong rival was command of the sea, provided the template for state control beyond national territory, as American policymakers sought autonomy of communications from the domination of British Marconi.
Compared with telegraphy more than a century ago, it is hard to overestimate the potential scale and scope of 5G applications and services. Given its capacity to support high data-rate instantaneous communications with low latency and massive connectivity, 5G could be widely adopted in developing new applications for mobile communication, eHealth, autonomous vehicles, smart cities, smart homes, and the Internet of Things. Not only have US telecom companies failed to establish any presence on 5G market, worse still, there does not seem to be the prospect of circumventing Huawei’s leading role in the sector by going with alternative technologies, like they did in the 1910s substituting submarine cable with radiotelegraphy. Ericsson and Nokia, two Nordic companies that are certainly deemed more trustworthy than Huawei by the US and its allies, also have the technology capacity, but are less competitive on price and have less ambitious plan for next stage R&D. Viewed in this context, it is almost irrelevant whether the dedicated Huawei Cyber Security Evaluation Centre (HCSEC), which was established as early as in 2010 in the UK, would eventually identify security loopholes in Huawei components, or that Huawei USA Security Chief Andy Purdy was able to offer a compelling rebuttal of the accusation that the company poses threat to US national security. The declining empire is bound to deploy whatever means available in its shrinking toolbox to deter Huawei’s advancement in global 5G business, even though the company only sells equipment to local service providers hence do not exert territorial control over the network.
In addition to territory, there are two other elements in Zajácz’s analytical framework, namely capital and technology, whose logic can well be in tension with the political law of sovereign control. On 17th August 2020, the US Commerce Department revised its sanction on Huawei for the third time, restricting any foreign semiconductor company from selling chips developed or produced using US software or technology to Huawei. But the restriction cannot be absolute. If American policymakers in the early twentieth century had to devise new regulatory measures in order to keep the loyalty of RCA under check while allowing the international expansion of MNCs, in the contemporary world of intensely connected global supply chains, it would be even more difficult to disregard the detrimental effect of the sanction on US companies. Recently it was reported that Intel has got the green light to sell certain products to Huawei, and Qualcomm, which is the main supplier of semi-conductor chips for high-end smart phones, is in the process of applying for a license to continue doing business with Huawei.
On the technology front, the tightened grip on supply chain has prompted higher level investment from both the Chinese state and the private sector on the R&D of semi-conductor chips. Although HiSilicon, a subsidiary of Huawei, announced last month that it would stop manufacturing its most advanced chips under the Kirin line, many who work for the company as well as industry observers within China are looking at this decoupling as a unique opportunity to spur home-grown innovation. Given the domestic market size, Huawei’s market share outside G7 countries, and the company’s comprehensive research capacity, it seems unlikely that the US will be able to significantly disrupt the innovation process through legislative means. For countries like the U.K., which decided to toe the line of American ally despite the lack of evidence on espionage from its own security vetting of Huawei, removing Huawei equipment from its 5G network by 2027 will not only incur huge cost, but also considerably undermine the infrastructural support for digital innovations that require high data-rate communication. This seems to run contradictory to the government’s emphasis on developing artificial intelligence industry in recent years. Amidst the COVID-19 crisis and the Brexit chaos, the UK government may not have the bandwidth to fully comprehend the implications of such decision, aside from the ineluctable urge of wrestling network control from its geopolitical rivalry.
This article gives the views of the authors, and not the position of the China Foresight Forum, LSE IDEAS, nor The London School of Economics and Political Science.