Huawei has been waging an aggressive campaign to convince the world that sanctions against it have been ineffective and have actually made it more competitive.
The Wall Street Journal recently article The article, titled “The US wanted to defeat Huawei, but Huawei is only getting stronger,” describes the surprising resurgence of China’s “national champion.” However, the numbers reported by the company just don’t add up.
Moreover, Huawei’s history of intellectual property theft and its leading role in creating the Chinese Communist Party’s (CCP) global surveillance state further underscore why the company cannot be trusted.
The indisputable figure is that the communications equipment giant suddenly $30 billion Revenues fell each year as the U.S. and its allies tried to prevent high-risk equipment from being introduced into domestic communications networks.
This program: Clean Network The campaign brought together 60 countries and more than 200 telecommunications companies to use only trusted 5G vendors to prevent the Chinese Communist Party from compromising security or interfering with critical supply chains in telecommunications networks. The U.S. also removed Huawei from the list of Commerce Department officials. Entity ListThis would prevent the procurement of critical chips and other technology from American companies.
It is not surprising that Huawei has responded aggressively, working to expand sales in China and secure local replacements for critical input components, but claims of a turnaround and near-instant replacement of advanced U.S.-made hardware and software inputs are dubious at best, given that Huawei itself is the source cited in a recent Wall Street Journal article and other articles.
Huawei suddenly had to find alternatives to the Intel and Qualcomm chips that power the world’s best smartphones — a field in which many chip enthusiasts compete — and if China could have developed something even close, it would have done so a long time ago. Plan It will spend more than $1.7 trillion over 10 years to build such capabilities by next year.
Even when the import ban took effect, China was still dependent on the United States for supplies of high-performance chips. Open Harmony The platform cannot match the advantages and performance of Android and iOS platforms, which have vast application libraries.
The reality is that a global ecosystem of trusted partners can develop better solutions than government-led emergency programs operating in isolation.
Similarly, the rapid introduction of domestic Huawei products Mate 60 Pro SmartphoneInitial assessments of the technology inside raise serious doubts about whether this is a true 5G chipset capable of operating at the speeds necessary to deliver world-class capabilities, and just as importantly, the chip solution will not be viable if China cannot produce it in large volumes and at low cost.
When a $130 billion hardware and software vendor loses nearly a third of its revenue, there are consequences: Precipitous declines in revenue lead to job cuts, the elimination of product lines, cuts to R&D, and reduced investment.
Despite a $30 billion decline in revenue, Huawei has reported impressive results: hiring new staff, expanding research and development, entering new businesses (such as electric vehicles), and reporting positive cash flow and strong profits.
This is only possible with massive outside intervention. Providing $3 billion in government aid for R&D over three years would provide little benefit to a program budgeted for over $60 billion over that period. Without the revenue the company has enjoyed, it would be impossible to continue operating at full cost without tens of billions of dollars in government aid per year. This is unsustainable, at least from a business perspective, in a competitive global marketplace.
If Beijing decides to preserve Huawei at all costs, China will have to pump tens of billions of dollars into the company to maintain its size and influence. And this is consistent with the view that Huawei is more than China’s “national champion” of the industry; it is an instrument of foreign policy and geopolitical influence. The money spent to support Huawei rivals its defense and intelligence budgets.
Huawei has a well-known history of intellectual property theft: the company and its US affiliates have been charged with trade secret theft, wire fraud, and obstruction of justice.
Huawei has been repeatedly accused of questionable ethics and strong ties to Beijing’s intelligence services, which not only harm American companies but also pose a serious threat to global security.
U.S. policymakers view Huawei as a commercial extension of the Chinese Communist Party, designed to advance the strategic objectives of the Chinese government under the guise of a private company. The company’s role in building a surveillance state in China is undeniable, with its technology being used to monitor and suppress dissent. This practice is particularly widespread. Xinjiang Uygur Autonomous Region Huawei’s technology is also being used for surveillance outside of China as part of the Chinese Communist Party’s genocide of the Uighurs.
The broad support for a clean network around the world highlights an important global consensus: untrusted equipment, once installed, undermines the integrity of communications and data and places supply chains under the Chinese Communist Party’s unpredictable control. Programs to restrict Huawei are not aimed at commercial gain, but are essential to secure communications free from Chinese interference.
The Chinese government is trying to prop up Huawei with extensive state support, which may temporarily halt the company’s decline, but no amount of fiscal policy can restore the credibility the company has lost, nor can subsidies restore its international clout.
The United States must continue its campaign against Huawei, recognizing that it is an ally of the Chinese Communist Party and a serious threat to both global economic stability and national security.
Keith Kluk is co-founder and chairman of the Kluk Institute for Technology Diplomacy at Purdue University. He previously served as Under Secretary of State and chairman and CEO of DocuSign and Ariba. Jonathan Persson is author of Wireless Warfare: China’s Dangerous Dominance of 5G and How We Fight Back.
