Global Impact newsletter: Huawei finds itself in the eye of the US-China tech storm

Global Impact is a fortnightly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world

In this sixth edition we look at Chinese telecommunications giant Huawei and how it came to be at the centre of the rapidly escalating US-China rivalry over technology

Reading Time:4 minutes

The US government saw Huawei as a serious national security threat, with the risk that Beijing could use the company’s technology to spy on American companies and individuals and steal their secrets. Photo: AP

Published: 2:00pm, 24 Aug 2020Updated: 3:55pm, 6 Nov 2020

Ren Zhengfei, the founder of Huawei Technologies, said the name for his company came from a slogan he saw on a wall, meaning “China has promise”.

And for many years, Huawei rapidly fulfilled that promise, becoming the largest manufacturer of telecommunications equipment in the world and the leader in next-generation 5G mobile communications technology.

But then the competition between the US and China to control 5G short-circuited its ascent. The cutting-edge technology promises to dramatically speed up mobile communications and usher in a new interconnected Internet of Things – from your car to your refrigerator – all controlled through your mobile phone.

The US government saw Huawei as a serious national security threat, with the risk that Beijing could use the company’s technology to spy on American companies and individuals and steal their secrets. Huawei has denied it is a security risk and founder Ren said the clash with the US over 5G was “inevitable”.

The US Commerce Department made Huawei one of the initial entries on its “Entity List”, banning US firms from doing business with it without a special licence. And the US-China tech war was under way.

The conflict expanded into the diplomatic sphere with the arrest of Huawei’s chief financial officer Meng Wenzhou, Ren’s daughter, in Vancouver in December 2018 at the request of the US on charges that she conspired to violate US sanctions against Iran. Meng’s bitter fight to avoid extradition to the US has hurt China’s relations with Canada, with China’s seizure of two Canadian citizens on charges of espionage widely seen as retaliation for Meng’s arrest.