DesPardes + PKonweb

Huawei Dumps USA, Moves Investment to Russia

Yes. This has happened, after Trump’s latest attack has ripped the chipsets from Huawei’s supply chain that the company needs to power its flagship smartphones and 5G equipment.

Will the U.S. let China build a digital “Belt and Road”? No way, some experts say. It’s a 5G dispute.

One expert (author of several books on US-China relations) tells DesPardes that China’s Made in China 2025 blueprint aimed to invest heavily in 10 specific sectors to overcome challenges of foreign control and build China’s tech independence. “This would liberate China’s industry and also allow it to shape global standard-setting processes”. “That was considered unacceptable to the USA”, says the expert.

“I expect USA and EU to push back on most other sectors of Chinese interest soon. In short, the U.S. is determined to preserve its technological dominance at almost all cost,” he adds.

These are desperate times for Huawei, so it upped the stakes.

Hong Kong’s South China Morning Post reports that Huawei CEO Ren Zhengfei during a recent visit to a Chinese university said, “After the U.S. included us on the entity list,” he said, “we transferred our investment in the U.S. to Russia, increased Russian investment, expanded the Russian scientist team, and increased the salary of Russian scientists.”

The message appeared to be, “You’re pushing us into Russia’s arms, you might want to think that through.”

The unintended consequence of Huawei moving out from the U.S. seems to be a win-win for Russia: an enemy’s enemy is a friend. Potentially though, it marks the first technological war of the coming digital era.

Last year, President Vladimir Putin accused Washington of “brazenly forcing Huawei from the global market.”

Huawei sales has soared in Russia during its blacklisting in the U.S.

One area on which Huawei is increasing its focus is playing a pivotal role in Russia’s 5G deployments. Putin is said to be looking to China’s example as he adopts elements of the country’s Great Firewall.

Last December, the Russian government announced it concluded a series of tests during which it successfully disconnected the country from the worldwide web as a step toward ‘Internet Sovereignty’.

Huawei is also said to be recruiting cybersecurity expertise in Russia, and has advertised for offensive as well as defensive cyber skillsets. Russia and China have complementary technical skillsets. So the overall initiative is a no-brainer.

5G rivalry, some observers say, is threatening to further divide the world’s digital universe by accelerating the U.S.-China decoupling in multiple dimensions and further disrupting global supply chains.

China and Russia represent the biggest cyber and physical security threat to the U.S. and its Nato allies, observers say. So Huawei’s investments and increasing presence in Russia will do little to abate any U.S. concerns even if a change in administration follows November’s election, they say.

Washington has reportedly warned about the risks of election interference by China and Russia.

“The perception that China is an existential threat to U.S. is bipartisan”, says a geopolitical analyst.

But it seems nothing can stop China from winning the global race to install 5G telecommunications technology. “Not government bans, not Trump’s “Spywei” barb last month, nor the debilitating COVID-19 pandemic.”

Despite these grave challenges, when it comes to 5G, China is actually extending its lead while other countries are plagued by delays, a Telecom professional in Pakistan tells DesPardes.

And despite the U.S. cutting off the supply of crucial mobile chips, “Huawei remains the top filer of standard-essential 5G patents, with the telecom giant set to remain a top global supplier of 5G equipment,” he adds.

Going forward we expect the new cold war with “digital Belt and Road” as red hot chilli pepper. Surveillance is an existential spaghetti. Russia has always figured in the shadows of the U.S. battle with Huawei.

“This is a much better explanation of my point,” says the China-US relations expert based in Asia-Pacific as he shared this latest piece in Foreign Affairs: “The Coming Tech Cold War With China: Beijing Is Already Countering Washington’s Policy.

PS: Not a whole lot, but here’s how (videoclip) we look at the whole thing –an alternative to breaking news and report (not The Onion):

Cat and mouse

Report aggregated by Irshad Salim in Islamabad