Self-harm by the United States, or, why Chinese news services are the most reliable

The following article is copied from Xinhua News, which I have for some time now found the most reliable, well-resourced and balanced of the many news services I have read over the years. The article is good example. Why? To begin with, it is based on careful research, with contributions from a number of journalists. Further, they see no need to rush in with some ‘scoop’, which usually turns out to be unverified rumour and gossip.

But I also like it since it shows how the Unites States is accelerating the process of its own decline through what can be called self-harm. And this process is based on stunning ignorance and misunderstanding of the rest of the world. Once you do this, you make one mistake after after another – note especially the section called ‘Groundless Accusation’.

(As an aside, this groundless accusation against Huawei was originally made in Australia, but there is a clear reason: Australian telephony has always been woeful and overpriced, so much so that people have become used to this situation. So you cannot have telephony and internet services that actually work, are efficient and relatively low-cost. That would be too much of a shock to the system. How will Australia roll out 5G? It will simply rename 3G as ‘5G’ and charge the earth for it.)

Restricting Huawei backfires on U.S. interests, disrupts global telecom industry

by Xinhua writer Gao Wencheng

BEIJING, May 24 (Xinhua) — Millions of Americans in rural areas may be denied access to faster and lower-priced broadband connections because of Washington’s restrictive moves against Huawei, a Chinese company which has offered equipment to U.S. rural telecom operators for years.

The U.S. government last week announced it would “prohibit transactions posing an unacceptable risk” to the country by declaring a national emergency over what it claimed are technological threats, and announced restrictions on the sale and transfer of U.S. technologies to Chinese company Huawei.

The ban would force small and independently-owned telecom operators such as Eastern Oregon Telecom and Union Wireless in Wyoming to spend their limited funds buying more expensive gear from Huawei’s competitors, according to an article in The New York Times by Chen Lifang, Huawei’s group board director.

Though accusing Huawei of being able to use its network equipment to spy on foreign nations for the Chinese government, the U.S. government has not produced any hard evidence to support its accusation. However, innocent victims in the global chains of the telecom industry would bear the consequences.

BACKFIRE ON U.S. INTERESTS

“A ban will not make American networks more secure. Instead, it will hurt ordinary Americans and businesses by denying them access to leading technology, reducing competition and increasing prices,” Chen said in the article.

“The ban will financially harm the thousands of Americans employed by the U.S. companies that do business with Huawei, which buys more than 11 billion U.S. dollars in goods and services from U.S. companies each year,” said Chen. “A total ban on Huawei equipment could eliminate tens of thousands of American jobs.”

The recent U.S. move to add the Chinese telecom company to a trade blacklist has already taken a toll on Wall Street. Shares of Huawei’s major suppliers, including Google, Qualcomm and Broadcom, were pressured.

Washington’s plan has also drawn resistance from domestic telecom carriers, especially those in rural areas, where the optical cable infrastructure is weak and the cost-effective Huawei equipment is considered as a better option.

James Kail, chief of LHTC Broadband, a digital service provider in rural Pennsylvania, told Xinhua that the ban could have an adverse effect on their business since they have a significant investment at stake as well as potential funding that could be jeopardized.

“About a quarter of small rural U.S. broadband providers use Huawei equipment, which is … at lower prices and better customer service,” Roger Entner, founder and lead analyst at U.S. telecom research firm Recon Analytics, told Xinhua via email.

Banning Huawei in the United States has the Federal Communications Commission (FCC) in a conundrum, Entner tweeted. “Is the FCC going to accept slower broadband build-out?”

GROUNDLESS ACCUSATION

According to some German media, after years of review, Britain, Germany and the European Union failed to find any backdoor in Huawei products.

Chinese Foreign Ministry spokesperson Lu Kang said in response that “the conclusions of Europe’s scrutiny have proven Huawei innocent, and showed the U.S. suppression against other countries’ enterprises with state power is unjustified.”

“We’d like to see the U.S. comment on the findings,” Lu said at a press briefing, adding that since the coming into light of the U.S. secret surveillance program Prism, the United States has remained silent over evidence alleging its illegal practices of cyber attacks and thefts.

Likewise, the 2019 annual report compiled by the Huawei Cyber Security Evaluation Center Oversight Board, staffed by representatives from Huawei and Britain’s government including the National Cyber Security Centre (NCSC) and telecommunications sector, detailed concerns about Huawei’s software engineering capabilities, but stated that the “NCSC does not believe that the defects identified are a result of Chinese state interference.”

Such conclusions came as a result of putting Huawei under a microscope.

“I don’t think any of the other vendors have been on such level of scrutiny to find out whether or not security risks exist in their software,” Stephane Teral, technology fellow and advisor for Mobile Infrastructure and Carrier Economics at the consultancy IHS Markit Technology, told Xinhua.

The United States has also been unsuccessfully trying to rally other countries to abandon Huawei products, citing security threats.

“Our perspective is not to block Huawei or any company,” French President Emmanuel Macron told the VivaTech conference in Paris.

The Department of Information and Communications Technology of the Philippines said that there was no incident of a national security breach from the local telecommunication network using Huawei equipment.

Major Malaysian mobile operators like Maxis, Celcom and U Mobile also said their cooperation with Huawei is not affected by the recent U.S. ban.

“ECONOMIC BULLYING”

With the use of state power, Washington’s groundless crackdown on Chinese private company Huawei is typical “economic bullying,” Chinese State Councilor and Foreign Minister Wang Yi said.

Such an egocentric approach by the United States will not win the recognition and support of the international community, said Wang.

Blameless companies around the world, including Huawei’s U.S. suppliers, could lose business, face disruptions and incur significant new costs, while China will only redouble its efforts to produce advanced technologies domestically, according to an editorial article published by Bloomberg.

As Huawei is deeply embedded in the global supply chain, “there might be other manufacturers that will be caught up in it,” Foad Fadaghi, an Australian technology analyst and managing director of Telsyte, was quoted by local media as saying.

The U.S. restrictions on Huawei would also hold back the launch of 5G networks and earnings of the tech sectors across the world, Swiss leading investment bank UBS said in its latest research report.

The Huawei ban in the long term “would also make network equipment more expensive because it could reduce the number of suppliers in what is already a small pool,” according to Standard Investment Bank’s note on Kenya’s telecom operator Safaricom.

In response to the U.S. restrictions, Ren Zhengfei, founder and president of Huawei, said Huawei had recently received widespread global support.

Huawei never wants to “walk alone” in the global markets, but has made good preparations for any extreme circumstances, he said.

Ren also appreciated the support of a large number of U.S. components suppliers over the years, and they were also lobbying for the easing of U.S. government-imposed restrictions.

“As long as the U.S. government allows U.S. companies to export the components, Huawei will continue to buy while sticking to its own research and development,” he said.

(Xinhua reporters Zhou Zhou in Washington, Ma Qian, Yang Shilong and Pan Lijun in New York, Wang Zichen in Brussels, Yuan Mengchen in Manila, Lin Hao and Jonathan Edward in Kuala Lumpur, Wang Xiaopeng in Nairobi, Guan Jianwu in Bishkek and Hao Yalin in Sydney also contributed to the story.)

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The game is up: you cannot install and run 5G without Huawei

For some time now, Huawei has been quietly confident that no-one else has the ability to install and deploy 5G technologies without involving Huawei itself.

Now the new figures are out from the World Intellectual Property Organisation (WIPO). In 2018, Huawei’s had 5,405 PCT (Patent Cooperation Treaty) applications, which – as Francis Gurry, the director of WIPO observed – is “an all-time record by anyone.” By comparison, the runner-up was Mitsubishi, in Japan, with 2,812.

And the vast majority of Huawei’s patents relate to 5G, to which the company has been devoting world-leading investment in research and development, backed strongly by the Chinese government.

Let me add that Gurry also pointed out that “Asia is now the majority filer of international patent applications via WIPO, which is an important milestone for that economically dynamic region and underscores the historical geographical shift of innovative activity from West to East.” WIPO statistics showed that 50.5 percent of all Patent Cooperation Treaty (PCT) applications filed in 2018 came from Asia, with Europe and North America accounting for about a quarter each.

What does all this mean for the future of 5G technologies, which can work more than 100 times faster than current systems. Let me quote the last part of an article from the People’s Daily:

“Our absolute competitive advantage in 5G is also another reason [for the lead in global patent applications],” the Huawei spokesperson said.

The year of 2018 was a key year for 5G development, and Huawei has been concentrating its research efforts on the next generation of wireless technologies since 2009.

The number of patents Huawei filed that were related to 5G also accounted for a large part of all the patent filings by the company, the spokesperson said.

Despite the US-led crackdown on the Chinese company, industry representatives have acknowledged that Huawei is a leading 5G player with the highest count of 5G 3GPP contributions and therefore not easily substitutable.

The New York Times said on Sunday that the US campaign to ban Huawei overseas is stumbling as its major allies resist.

“Huawei is one of the leaders in the 5G space with substantial influence and significant contributions,” Charlie Dai, principal analyst at American consultancy Forrester, told the Global Times on Tuesday.

According to the latest figures intellectual property tracker IPlytics GmbH published in February, Huawei holds 1,529 5G standard essential patents, ahead of Nokia, which holds 1,397. Samsung has 1,296 and Ericsson holds 812, the analyst noted.

“Technically it is possible to find workarounds regarding Huawei’s technology, but it would be a huge waste of money and not beneficial for the whole ecosystem,” he said.

The game, it would seem, is up. If you want 5G and all that it enables, you will have to work with a Chinese company like Huawei. Indeed, the major tech companies in other parts of the world have already realised this. They have ignored the politically-motivated efforts of a small number of former colonisers and already signed up to work with Huawei.

2018: The Year Apple Products Became Obsolete

Is 2018 the year that the global symbol of U.S. technological innovation became obsolete? Or is it the year when we began to realise a reality that has actually been the case for a while?

Not so long ago, it was a given that Apple products would be manufactured in China, but that the crucial value-adding would take place in the United States’ infamous Silicon Valley. In this way, companies like Apple could maintain a stranglehold on the global supply chain. No matter that it was often Chinese whizz-kids who were actually in Silicon Valley, finding new ways to keep Apple in front and ensuring the final value-adding.

In 2018 a few small but significant shifts took place. Let put this in terms of personal experience. A couple of years ago and against my better instincts, I had accepted a Macbook Air from an employer. I eventually became used to the machine, even with its counter-intuitive and closed structures. It had a good battery and good modem inside and it seemed to work passably well for the first year or so. But it was always a frustrating piece of equipment. After a year or so, its basic clunkiness became more apparent. Despite all the vaunted hype by Apple enthusiasts, I found it no better than other machines I had used earlier.

In late 2017 I was fed up. In Beijing I bought a new Xiami laptop, which had recently been launched. At all levels, it is simple a superior piece of equipment. Xiaomi’s aim is to produce the best possible product at a reasonable price. This one was about half the cost of a Macbook Air. What had happened? I thought. Is this an anomaly? No, the value-adding had all taken place in China.

I could repeat these observations concerning the Xiaomi phones, but perhaps Huawei is a better example. In 2018 Huawei produced the world’s best smart phone, with integrated AI (artificial intelligence) and a ‘killer’ camera developed by Leica. Its global market share surged past Apple, and is now just behind Samsung. In a couple of years, it will become the world’s top-selling smartphone.

Is this a sudden development? Not at all, for the enmeshed socialist market economy of China has been in this path for a number of years. Technological breakthroughs – from high-speed trains, through bridge construction to smart phones and quantum communication – have been actively fostered. For example, for some years now more new patents are registered from Zhongguancun (near where I live in Beijing) than from Silicon Valley. While the former has been attracting more and more global talent, the latter has seen a brain drain.

In this light, the crude efforts – by one or two countries such as the United States and Australia – to suggest that Huawei, for example, is a ‘security risk’ should be seen for what they are: desperate rear-guard actions to try and restore the fortunes of companies like Apple.

The catch is that people know the technology is now increasingly obsolete and yet one is supposed to pay a premium price for such technology.

As someone from India – where Chinese high-tech products are in very high demand – put it: I am sick of the United Stated forcing obsolete technology on the rest of the world at gunpoint.