UK 5G Decision Muddles UK-US and UK-China Relations

THE UNITED KINGDOM’S renowned ability to muddle through the middle is being put to the test. The Johnson government’s decision to allow Huawei a continuing role in developing the United Kingdom’s 5G networks is a case in point.

Beijing threatened repercussions on China’s trade and investment with the United Kingdom if Huawei was excluded. Washington threatened to cut off intelligence sharing with London if it was not.

The Trump administration is pursuing a global campaign against the telecoms giant which it accuses of spying for China, a charge the company denies. That campaign is a pivotal battle of the Trump administration’s technology war with China.

With Brexit barely hours away and the United Kingdom needing future trading relationships with both of the world’s two largest economies, wiggling along the fence bottom down and damn the splinters was Prime Minister Boris Johnson’s only option. It is a discomfort that will be familiar to US allies that are China’s regional neighbours.

Hence the Shenzhen-based telecoms giant will be allowed up to a 35% share of the UK 5G network’s periphery, i.e., the radio access network, but be banned from the most sensitive part, the core, and excluded altogether from areas near military bases and nuclear sites.

The 35% cap also applies to the rollout of the UK’s fibre broadband network, for which Huawei already has a 45% share. Similarly, the company currently exceeds the 35% cap in two of the three of the four UK mobile networks that deploy Huawei kit.

The government’s decision still needs the UK parliament’s approval. Voices in Washington are urging backbench MPs to oppose it for the sake of preserving the special relationship between the United Kingdom and the United States. They will also argue, correctly, that the core and the periphery of 5G networks are converging, so even periphery access now is a (not so) long-term security threat.

The Trump administration already regards the United Kingdom as an unreliable ally for moves such as joining Beijing’s Belt and Road-linked Asia Infrastructure Investment Bank against Washington’s wishes and for generally being more accommodating to China than it likes — although the Trump administration’s default view is that any ally that does not fall entirely in line with its wishes is unreliable. As the president had made calls to Johnson ahead of the Huawei decision, his next reaction is reliably likely to be petulant.

While the 5G decision will be as irritating to China as it is the United States, for Huawei, the win, in so far as it is not a defeat, comes as the Trump administration is seeking to bolster its barriers against the company gaining access to US technology. Washington has leaned heavily on its allies, although only with any success with Australia, New Zealand and to an extent Japan. European nations and the EU, bracing for a trade assault from the Trump administration, have been less accommodating.

Commerce Secretary Wilbur Ross says tighter restrictions are coming Huawei’s way. However, US reports have said that a proposal to further restrict US companies from selling computer chips and other components to the company, including for the first time via their overseas subsidiaries, has been delayed.

The defence establishment is concerned that the move would accelerate China’s drive to develop indigenous technology. At the same time, the lost sales by US firms could cut into their research and development spending, at the risk of blunting US military technological superiority.

On another front, court proceedings are underway in Canada to have Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, extradited to the United States to stand trial on fraud charges connected to alleged busting of sanctions on Iran. Meng denies the allegations, and the case could take years to resolve.

Prosecutors say Meng’s case is separate from the broader trade dispute between the United States and China. However, the inverse is true. The trade dispute is only a part of the more existential confrontation between Washington and Beijing for technological leadership in which the United Kingdom finds itself uncomfortably caught in the middle.

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Filed under China-U.K., China-U.S., Technolgy

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