The US and China are engaged in a bitter fight over Huawei, the Chinese telecommunications giant. The US has blocked Huawei from its markets and is restricting its access to US technologies and suppliers that have helped it become one of the great world companies. China has responded by threatening to introduce measures against US companies in retaliation, and accelerating its domestic program to build sophisticated semiconductors to ensure that its companies cannot be blackmailed or crippled in the future. On the surface, this seems like another fight over trade. Yet it goes much deeper, and is a sign of a stark transformation in global politics. America’s problems with Huawei have little to do with US President Donald Trump’s obsession with the terms of trade. Long before Trump was elected, US officials were warning about Huawei, and trying to frustrate its rise.1 Indeed, Trump’s single-minded view of trade as the problem may lead him to swap a more free rein on Huawei for other concessions, frustrating his own national security officials.
Why Huawei?
To understand the real, secret story of the Huawei fight, it is first necessary to understand how the nature of globalization has shifted. Economic networks once seemed to be a way of building global markets, crisscrossing the planet with new technologies that would smooth away the frictions of information exchange, trade and global finance. As Chinese companies such as Huawei began to build and participate in these networks, they would imbibe the spirit of entrepreneurial capitalism, and bring it back home, slowly transforming an authoritarian regime into something more open.
It hasn’t worked out that way. Now, global networks seem less a harbinger of market efficiency than a plaything of nation states warring for strategic advantage. American officials see companies such as Huawei, with its obscure ownership structure and ambitions for global dominance, as threats to their national interest, and an effort to reverse their own past domination of global communications networks. The result is that a secret war has broken into the open, transforming fights over trade into a greater conflict to dominate the networks that are shaping the global economy.
In a recent research article in the academic journal International Security, we explain the logic of the shift toward what we call weaponized interdependence.2 After 25 years of turbo-charged globalization, most economies rely on common systems and networks. The Internet supports an endless hubbub of commercial exchange and exchanges of opinion. Financial networks such as the SWIFT messaging network and the dollar clearing system allow money to be transferred quickly and efficiently around the world. Logistics and communications networks have transformed national manufacturing systems into vast and intricate global supply chains, radically changing how products are made and conveyed to customers.
Henry Farrell and Abraham Newman Weaponized Globalization: Huawei and the Emerging Battle over 5G Networks, Global Asia (Lead Article) (September 2019).