After it became apparent the US government would ultimately reject them, the Chinese
telecom giant Huawei recently gave up on its attempt to acquire the American company 3Leaf. Even before the decision was announced, Chinese pundits were already loading their cannons in response to the probable rejection.
It’s hard to blame them. Huawei has been at the butt of several rejected deals in the US in recent years based on dubious national security concerns. Huawei is almost certainly a victim of American politics.
Some pundits have taken their responses too far though. A recent Global Times editorial suggested, “If the bid is rejected, China should launch retaliatory measures against US businesses over here.”
The suggestion conjured up similarities to the ancient Code of Hammurabi which had a basic “eye-for-an-eye” principle. One law stated that “If a builder builds a house for someone, and it falls in and kills its owner’s son, then the builder’s son shall be put to death.”
That law was deemed archaic some 3,500 years ago, but the suggestion that American businesses in China should be punished for Huawei’s rejection isn’t too far off the mark. Foreign business owners in China must have felt a chill go through their spine upon reading that editorial.
The suggestion makes an all too common assumption that a country is a single body where the actions and thoughts of all its people and institutions are coordinated. But being from the US doesn’t mean a business supports US government polices like the one impeding Huawei. And those companies certainly don’t have any power over the matter. These pundits are suggesting lashing out at innocent bystanders simply because they don’t see any better options.
Even if that kind of retaliation were justified, it would hardly be effective from a practical standpoint. It would probably even make things worse. The US government blocks deals like Huawei’s because, no matter how well-established and independent a Chinese company is, Americans will still see it as “China Inc.” and want it dismissed on any grounds. American leaders are happy to soak up the kudos that come with saving American jobs by expelling a seemingly red communist enterprise.
If China retaliated against American companies, it would just enhance that shady image in most Americans’ minds. They would simply call for further retaliations against other Chinese companies and, in the coming election cycle, American leaders might feel compelled to chase those cheap political points.
From China’s standpoint, it’s hard to bite this bullet and refrain from making some kind of retaliation while one of its companies is being treated so unfairly. But they should also keep in mind that China isn’t exactly a shining example of fairness toward foreign enterprises.
China requires technology transfer from foreign companies, enforces intellectual property laws far less stringently when foreign companies are being ripped off than when Chinese companies are, and the state owned media regularly takes shots at foreign companies while neglecting the problems of their Chinese competitors.
If one looks beyond business to fields like journalism, they’d be hard pressed to find an example of a Chinese journalist in America being followed, threatened, arrested, beaten or deported for carrying out their basic reporting duties in accordance with the law.
Huawei is getting a bum deal and Chinese are justified in sticking up for it. But they need to stay rational at the same time. To advocate indiscriminate retaliation against companies simply because they’re American is little different from throwing rocks through McDonalds’ windows when the US government offends China. It’s tempting to go after the easy target, but reckless and ultimately useless.
In this article it’s a foregone conclusion that there are no legitimate reasons for seeking to exclude Huawei from entering the US market… Is that not an open question? Have all those potentials been explored?
There doesn’t seem to be any solid reasons for excluding Huawei. A group of senators wrote this letter when Huawei was in talks for a Sprint deal last year:
http://graphics8.nytimes.com/packages/pdf/business/20100823-telecom.pdf
Many of the points the senators make are very shaky, and some go down a very slippery slope. Like making ties to the Taliban and saying the Chinese government subsidizes Huawei which MIGHT be a precursor to undercutting competition in the Sprint deal to gain access to the sensitive American industry. It seems to be mostly here-say without much solid evidence. Most of the opposition though seems to hinge on the fact that Huawei’s founder used to be in the PLA, but again…there’s no evidence that the PLA is trying to use this to infiltrate sensitive American industries or that they would even be able to in the context of the proposed deal.
There are times when I question the american definition of capitalism and democracy compared to the chinese mantra of ‘socialism with chinese characteristics’.
The USA subsidizes its own car manufacturing industry, its steel producers its farmers and banks, to name but four, economically there seems little difference between the two nations.
The principle of ‘Do as I say not as I do’ is collapsing throughout the arab world a lesson I hope we in europe will learn sooner than later. We will do well to remember the quote: “Democracy never lasts long. It soon wastes, exhausts, and murders itself. There is never a democracy that did not commit suicide.” – Karl Marx? Mao ?
No, John Adams 2nd or 3rd President of USA! One wonders what his definition was ?
I attended an event organised by the Jamestown Foundation earlier this month. James Mulvenon spoke there. He pointed out a few key things related to this, without touching on it directly. But from what he said, the subtext was that 1) Huawei et al. have an interest in spying on US data networks (duh), 2) this wouldn’t necessarily be done through the hardware in and of itself, but through software updates and patches later on down the line, 3) we (as in, the US—I’m not a US person) are already operating in an environment where most network software is made in China so need to build in assumptions about communication channels being compromised already. If I were more organised I would be able to put my figure on the audio file. Anyway, the take away from his speech was that it’s a given that they have a strong interest in being able to supply intelligence information about US communication channels to the Chinese Communist Party. I am also unclear about the details of the proposed deal, but I suppose it would correspond to point 2). He also mentioned how Huawei would manufacture their products with other labels on them, so they didn’t look like Huawei products, or something? Now I want to listen to his speech again. I’ll stick the audio on my dropbox if I find it and paste the link here. All legitimate questions. I think it is an empirical matter to dig into them and come up with a more-or-less accurate answer. Often the discussion gets clouded by politics.