In 2019, the White House said Chinese tech companies’ phone and internet equipment should be ripped up from all corners of the United States because it posed an unacceptable risk of espionage or sabotage by the Chinese government.
More than three years later, most of this equipment is still there.
Today, I’m going to look at how the United States handled equipment from two Chinese companies, Huawei and ZTE. I’ll explore what this can tell us about America’s ability to effectively address concerns about other Chinese technologies, such as apps like TikTok, and its efforts to become more self-sufficient in chip manufacturing and design. computers.
Technology will no longer be a virtual American monopoly, as it has been for the past half century, and the United States must develop and execute plans to help it benefit from global technological developments while maintaining security. and innovation of America. But the history of Chinese equipment shows that we still have a long way to go.
Some US officials believe the continued use of equipment from Huawei and ZTE is a serious threatens to American national security. Other policy experts I’ve spoken to say it poses negligible risk and it may not be worth trying to remove all the gear right away.
What is clear is that the United States declared a ban on Chinese technology urgent and then failed to enforce it.
Removing Huawei and ZTE equipment, which are primarily used in rural areas of the United States, was never going to be easy, and complications from the pandemic have made matters worse. But critics of the US approach have also said the way authorities have handled it has hurt American businesses and consumers without making the country much safer.
Let me go back to how it all started. For about a decade, U.S. officials have repeatedly said Huawei and ZTE phone and internet equipment could be used as gateways for Chinese government espionage or to disrupt critical U.S. communications. These warnings persuaded the largest US telephone and Internet companies, such as AT&T and Verizon, not to purchase such equipment.
Almost everyone in the US government and business community who works on this issue says it was the right thing to do. (There is less consensus on the wisdom of restrictions on Huawei smartphones.) Huawei and ZTE have always said that these security issues were unfounded, and that the US government has never provided public evidence of its claims. .
Small businesses, mainly in rural areas, were not so strongly discouraged from purchasing Huawei and ZTE equipment. A sizable minority continued to purchase items from companies, such as devices similar to home internet modems and hardware to bounce mobile signals.
The US government said it was too risky. As of 2019, the United States effectively ordered all companies with Huawei and ZTE equipment to replace everything. The government has promised taxpayers’ money to help pay for comparable equipment from American or European companies.
The Federal Communications Commission has already estimated the cost of replacing Chinese equipment to be around $2 billion. An updated estimate disclosed last month has shown that it is $5 billion. It will take time for the FCC and Congress to work out how to pay the amounts that small telecommunications companies say they need. Meanwhile, many such vendors haven’t even started replacing Huawei and ZTE gear, like Politico reported last month.
There’s a lot of finger pointing about how this happened. Congress imposed a mandate on small businesses, then didn’t follow through with the money. US officials wondered what kinds of Huawei and ZTE equipment should be replaced. The delay and confusing official messages slowed down the process.
Naomi Wilson, Asia policy specialist at ITI, a trade group of US technology and telecommunications companies, told me that early estimates for equipment replacement were best estimates that turned out to be far too low. Inflation, supply chain issues and a trade war between the United States and China drove up the price.
A big question is whether this tragedy could have been avoided. I asked Paul Triolo, senior vice president for China at Albright Stonebridge Group, a strategy firm, if the US had a good plan with wobbly execution or if the strategy was misguided to begin with. He said it was a bit of both.
Triolo said the US government could have phased out Huawei and ZTE equipment over many years – similar to the UK approach – and accelerated the removal of certain types of equipment or Chinese equipment near sensitive locations such as than military installations. While the United States has said it needs to quickly remove the risk from the equipment, it all remains in place anyway, he said.
Triolo and other China policy experts I’ve spoken to worry that American approaches to Chinese technology aren’t always effective or focused on the right things.
The United States is also concerned about the potential for TikTok or other apps from Chinese companies to siphon off sensitive data about Americans or spread Chinese government propaganda. Policymakers have yet to figure out how to address these concerns or make much headway on the relentless Chinese cyberattacks on US government agencies and businesses.
Officials don’t always have consistent messages about building a local computer chip industry to counter China. And if the United States wants to maintain the strength of American technology, it could do more to support the immigration of tech experts or repeal Chinese tariffs that hurt Americans.
The United States could, in theory, do it all. Officials could protect the country from potential foreign dangers and devote the time, money, and intelligence needed to support the best American innovation policies. Instead, we have bits and pieces that don’t add up to much yet.
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