Huawei faces up top protectionism

As technology giant Huawei faces the apparent rise of protectionism in Western countries, leading European industry insiders and academics suggest the Chinese company must focus on nurturing its solid ties with key existing overseas partners in order to wade through difficult times.

The pressure on Huawei that originated in the United States has in recent months escalated and spread to Europe, with the University of Oxford suspending Huawei funding and the German government reportedly considering barring Huawei from its 5G mobile networks last week.

Amid this, many of Huawei's existing partners have firmly supported the company, reassuring the public of their trust and continued collaboration.

Shortly after Oxford said it will stop accepting new Huawei funding, a handful of British universities have reaffirmed they will not stop working with Huawei without solid evidence suggesting otherwise, including the Surrey, Manchester, York, Cardiff, Edinburgh, Southampton and Imperial.

BT has repeatedly stressed that Huawei is "a valued innovation partner". The leading German industry association BDI has said that no vendors should be excluded from Germany's 5G mobile networks if there is no evidence against them.

Peter Williamson, an honorary professor of international management at Cambridge Judge Business School, said Huawei's strong relationships with partners across Europe built over the past decade are paying off.

"Huawei's large customers in Europe tell me that they greatly value the quality of technology and customer service provided by Huawei and they will therefore strongly resist any political pressure to exclude Huawei," Williamson said.

Such relationships, with Western businesses, customers and local governments, will become more important for Huawei and other Chinese companies if political sentiment worsens, said Williamson.

Huawei, a telecoms company founded in 1987 in Shenzhen, has grown at an incredible speed with a projected 2018 revenue exceeding $100 billion. In the smartphone market, it has become the world's second-largest player by market share, ahead of Apple. The company is also investing heavily into 5G technology.

However, its international growth has encountered challenges, first in the US in 2012 when a congressional probe raised national security concerns. Tension escalated last year when Canada arrested Huawei chief financial officer Meng Wanzhou, who is also daughter of the company's founder, Ren Zhengfei.

More recently, some British politicians have voiced concerns over Huawei equipment, and Germany's business newspaper Handelsblatt reported that the German government is actively considering excluding Huawei.

Some experts say these developments are signs of protectionism.

"The difficulties (Huawei) faces are purely political – a feeling in some countries, especially the US, that China should not be able to lead new technologies such as 5G mobile. I am afraid, that this is not a one-off incident but rather reflects that some powerful people in Western countries fear China's rise," said Williamson.

Jeffrey D Sachs, a professor of sustainable development at Columbia University, shares this view. Writing in a recent article on Project Syndicate, he said: "The US is targeting Huawei especially, because of the company's success in marketing cutting-edge 5G technologies globally."

Sachs stressed that it is important to note that the US government has not yet provided any evidence for its claim regarding Huawei security concerns, and said the way the US has discriminated against Huawei amounts to "an economic war on China".

"Huawei is one of China's most important technology companies, and therefore a prime target in Trump administration's effort to slow or stop China's advance into several high-technology sectors," Sachs said.

Until the University of Oxford's suspension of Huawei funding last week, the company had insisted that its UK business operations remained unaffected by any media hype. Huawei is awaiting an explanation from the university.

Huawei has repeatedly emphasized that it has never breached any laws in countries it operates in, and has never had a cybersecurity-related incident. In the UK it runs a cyber-security evaluation center in Banbury, Oxfordshire, to detect potential problems. The center's work is overseen by the UK's National Cyber Security Centre, and so far it has not discovered any problems.

BT reaffirmed in January that it is going ahead with Huawei partnerships on its 5G networks.

In November 2018, BT's Chief Architect Neil McRae praised the quality of the company's equipment at a forum in London. He said: "there is only one true 5G supplier right now and that is Huawei, the others need to catch up."

The University of Surrey, which has received continued Huawei investments into its 5G Innovation Centre since 2014, said Huawei is a "key partner" with whom it is collaborating to develop 5G capabilities.

"We will continue to work with all our research partners, including Huawei, unless there are clear and compelling reasons not to."

Mark Adams, chairman of British tech consultancy Honey Partnership, said he feels Huawei equipment should not be a security concern in the UK.

"Surely we should do business with large and professional businesses, such as Huawei, which has a good track record and reputation for delivering high quality network equipment, and which are actually more likely to have greater security expertise," Adams said.