British Feelings On Using Chinese Telecom Equipment Hardening

The threat made by China to Australia for having the temerity to ask questions about the genesis of the Covid virus is a relatively cheap way of putting down a marker to the rest of the world.

This comes as a number of countries are considering similar investigations around the world. After the intervention of French medicine Nobel laureate Luc Montagnier who claimed that "The Wuhan city laboratory has specialized in these coronaviruses since the early 2000s. They have expertise in this area," and going further making clear allusions to the idea the virus may well not have been an accidental natural mutation.

This combined with the that delay in reporting the disease, and the arrest and  disappearance of the Chinese doctors who first reported the disease and highlighted it to humanity have made the rest of the world highly skeptical of anything the Chinese authorities say about the pandemic, be it  science itself or particularly casualty figures.

A key development in this global skepticism isn’t just formal government-sponsored investigations, but a mood that is turning ugly when it comes to Chinese technological and industrial reach.

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It does feel that the world is changing. Whether permanently or not is yet to be seen. We can be sure that most things will return to normal, just as the jungle reclaims a deserted temple, mankind’s hardwired tendency to be gregarious is more powerful than government advice to stay at arm’s length from one another's, strangers are after all new friends yet to be discovered, and lovers must meet.

But somethings will not be the same again. One of these is the reputation of the Chinese political and economic behemoth and its relationship with western countries. But as with so many things, we can see there are two distinct camps in the liberal democracies of the West. The two broad poles are easily exemplified by the approach of the EU and the approach of the Anglosphere.  One key aspect is the attitude being taken towards the Chinese tech giant Huawei and its access and involvement in national tech infrastructure.

The global spread of Huawei and its involvement in the world’s 5G telephony and internet systems has never looked more precarious.

It was bad enough for Eric Xu, chairman of Huawei, when he announced on the 31^st March a squeeze in profits in 2019-20. "2020 is going to be a very crucial year to test whether Huawei’s supply continuity program can work in an effective way,” he said, "There are also several cases where Huawei equipment was used to power 2G, 3G, and 4G networks, and yet the customer didn't choose Huawei for 5G, or didn't choose Huawei for selected geographies. Those examples include Optus and VHA in Australia, TDC in Denmark, and [Telecom] Italia in Italy," moaned Xu.”

Now the figures are out, and they make salutary reading. The firm reported a 1.4% gain in revenue to 182.2 billion yuan ($25.7 billion) in the period, down from 19% over all of 2019. Its net profit margin shrank to 7.3% from 8% a year earlier

The US government is continuing it’s aggressive approach to the company, and will have been heartened by increasing moves against the UK’s agreement to allow Huawei limited participation in the ongoing development of the UK’s 5G networks.

At present mobile operators in the UK will be able to use Huawei equipment in their new 5G networks, but only in limited parts of their infrastructure, and only to a fixed maximum percentage, because it is a “high-risk vendor”, according to the British government – but in what way the government refused to elaborate upon.

The Minister in charge of the process, Baroness Morgan, said in January the UK would attract, “established vendors who are not currently present in the UK”, and would support “the emergence of new, disruptive entrants to the supply chain”, as well as promote “the adoption of open, interoperable standards that will reduce barriers to entry”.

At the time Huawei vice president Victor Zhang, the firm’s UK boss said, “Huawei is reassured by the UK government’s confirmation that we can continue working with our customers to keep the 5G roll-out on track. This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future. It gives the UK access to world-leading technology and ensures a competitive market.”

But the U.K. is reconsidering the role in the light of Chinese behaviour over Covid-19.  It is clear that support in the U.K. Parliament for giving Huawei a role in Britain’s 5G network is collapsing. Increasing numbers of the governing Conservative Party are opposed to the idea. U.K. lawmakers have recently expressed that a law letting Huawei supply 5G technologies would not now pass Parliament.

The shift in parliamentary opinion is driven by concerns over China’s nontransparent handling of the coronavirus pandemic. Earlier this week, Britain and Australia both called for investigations into how China has handled the pandemic—a move now supported by over 80 percent of the British public.

Already actions are being taken, on April 7^th, the UK Government acted to hold up an attempt by a Chinese investor to take control of a British chip producer, Imagination Technologies. The former head of British intelligence agency MI6, Richard Dearlove has called for the takeover to be blocked recognizing the  “deep rivalry” between China and the West over technology.

Even on the continent of Europe there are suspicions. E.U. competition commissioner Margrethe Vestager this month suggested that European governments should buy stakes in local tech firms to hinder Chinese takeovers.  The German Economy Minister Peter Altmaier, has expressed similar willingness to intervene.

Group Tom Tugenhadt Chairman Commons of the cross party Foreign Affairs Select Committee said, "The one thing that really marks out the Chinese Communist Party is not that they didn't have sufficient data, but that they deliberately falsified the data."

A new group set up in Parliament, the China Research, will look beyond the pandemic itself to study China's long-term economic and diplomatic aims with the goal of influencing UK policy decisions. But it will be conducting a specific study into the consequences of new technology and who owns platforms, as well as China's foreign policy, particularly in relation to the world's poorer regions.

In all of this is the intervention of The First Secretary of State Dominic Raab, when he made it clear that the UK's relationship with China wouldn’t return to "business as usual" post-pandemic. His comments chime with senior backbenchers in his party.

One said,

"My sense from colleagues I've spoken to, is that there is a definite hardening of attitude and definite concern that China has failed to face up to its responsibilities in the whole context of coronavirus."

Another told me,

“I can’t believe that the Chinese communist government's conduct during the Covid 19 crisis has endeared them to colleagues, I believe the mood is strengthening”.

China has had it easy so far, it’s sheer economic might has cowed nations into quietude, but the sheer magnitude of the pandemic and the opacity of China’s approach has put the world’s backs up. It may not find that bullying works as well as it did in the past. After China threatened sanctions on Australia for it’s lesse majestie in holding an enquiry, the Australian finance minister was unbowed. Josh Frydenberg replied bluntly to the Chinese this week. Australia, he said “won’t bow to economic coercion, we will continue to talk up in Australia’s national interest and we won’t trade off health outcomes for economic outcomes.”

5 G poll

German support for protective intervention.

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