The U.S. government plans to use private capital to speed up the development of 5G technology to counter the threat posed by china’s unfair competition. Experts agree that if Huawei is allowed to monopolize the market, it will be to everyone’s detriment.
Federal officials said subsidies from the Chinese regime have caused unfair competition in the telecom industry, and pose a threat to U.S. national security and businesses.
Defense and commerce officials recently announced a plan to combat the threat: Using private equity to accelerate innovation and development of America’s own 5G technology.
The plan was discussed at the Bureau of Industry and Security’s annual forum in Washington.
James Lewis, Director of Technology Policy, Center for Strategic and International Studies said: “If Huawei was a fair competitor, we wouldn’t have any trouble. I mean the dilemma is that the Chinese government subsidizes them. They get a lock on the market. You just saw that with the Dutch, and then the Dutch find it really hard to change, right? Because they’re locked into a single supplier.”
Currently, given the subsidies and the support Huawei gets from the Chinese regime, the telecom giant has twice the R&D funds compared to other big companies in the industry.
AFP recently revealed that Huawei has received $1.6 billion from the Chinese state in the past decade, more than half of which is in the form of “unconditional government subsidies.”
“Huawei would be a competitive company even without the Chinese government’s support. But with Chinese government support, there’s security issues, there’s innovation issues, and that’s what’s driving a lot of the concern,” Lewis said.
American companies say if the unfair competition continues, it will take only three to five years for Huawei to monopolize the 5G market.
Chris Boyer, AT&T’s Assistant VP of Global Public Policy said, “We have to ensure that over time that we have plenty of options in the supply chain, that we’re not locked in with only a couple vendors who are competing with what some would argue is a state-subsidized entity that is continuing to grow its market share.”
Industry experts say fair competition is the only way to ensure the world doesn’t end up in a dangerous situation.
Travis Russell, Director of Cybersecurity at Oracle said, “We don’t want to get into a position where there’s only one choice, because then everybody loses globally if we get into that position. That to me is the largest security concern that we have.”
In May, President Trump signed an executive order to secure U.S. information and communications technology supply chains from being exploited by foreign adversaries. The same day, the administration placed Huawei and 68 affiliates on a blacklist, prohibiting U.S. companies from selling their technology to them.