Attacking Huawei Will Backfire

(Bloomberg Opinion) -- The arrest last week in Canada of Meng Wanzhou, the chief financial officer of Huawei Technologies Co., China’s iconic company, is a watershed event. The arrest, made at the behest of the U.S. Justice Department, has roiled markets around the world. It threatens to derail trade talks between the U.S. and China, and to expose American businesses and executives in China to retaliation.

But the sense of humiliation Meng’s arrest has provoked, and the passions it has unleashed in China, will also have long-term political effects.

Public opinion in China, as well as official statements, has already expressed cold anti-American fury. The sentiment that the U.S. is ruthlessly thwarting China is unanimous. Here, as in many contemporary conflagrations, history should be our guide — and a warning. 

It’s worth remembering today that an anti-American boycott — of the kind now being popularly mooted — was China’s first mass political movement of the modern era. Erupting in 1905, it expressed a long-simmering dissatisfaction with China’s Qing rulers for failing to stand up to foreign powers and protect Chinese interests and dignity.

A leading promoter of the boycott was Liang Qichao, China’s foremost modern thinker and an early intellectual mentor to its communist leaders. Liang had already warned his compatriots about their lowly status in the world, and prescribed ways to overcome it.

He had returned from the U.S. in 1903, convinced that America’s new corporations would become more powerful world-conquerors than Alexander the Great and Napoleon. According to Liang, China urgently needed to accelerate industrial production through capitalist methods carefully regulated by the state. This was how it could withstand the unprecedented power of American capitalist imperialism.

After many calamities and tribulations, China has in fact fulfilled Liang’s dream of national pride and dignity — to the point where the U.S. today fears the dominance of a Chinese corporation like Huawei (literally translated as “China’s achievement”).

Over the past three decades, Huawei has transformed itself from a small maker of telephone switches into the world’s largest supplier of telecommunications equipment. In recent months, it passed Apple Inc. to become the world’s No. 2 smartphone maker, behind Samsung Electronics Co.; it produced what by a broad critical consensus were the best smartphones and laptops of 2018.

Huawei also leads in the revolutionary and strategically vital new technology of 5G, with its 80,000 research engineers and $13 billion annual research and development budget.

The U.S. has responded to Huawei’s global edge in the past year by presenting it as a Trojan horse for Chinese military interests, and urging its allies — Australia, Canada and the U.K. — to participate in a broad ban on the company. But Washington has yet to publicly offer any evidence of Huawei’s involvement in spying or cyberattacks.

The argument that Huawei’s founder is a former officer of the People’s Liberation Army, and therefore prone to help the Chinese government and military, becomes even less persuasive when one considers the close and gilded links between the Pentagon and Silicon Valley.

As the New York Times reported in 2013, “For years, the Pentagon has knocked on Silicon Valley’s door in search of programmers to work on its spying technologies.” The CIA funds a venture-capital entity that invests in dozens of companies whose products could be useful in spycraft. Moreover, the U.S. government has surreptitiously used private companies, including Verizon Communications Inc. and AT&T Inc., to collect data on American citizens as well as foreign nationals.

Certainly, neutral observers of the U.S. war on Huawei won’t be much impressed by the charges against Meng: that she misled American banks about a Huawei subsidiary that did business in Iran, inducing them to violate arbitrarily imposed U.S. sanctions.

The Chinese suspicion that there is a concerted American campaign against Huawei should be bolstered by the fact that President Donald Trump blocked a bid from a Singapore-based chip company for American chip maker Qualcomm Inc. As the highly secretive Committee on Foreign Investment in the U.S clarified, Qualcomm, which is locked into competition with Huawei on 5G patents, could’ve been undermined by the deal.

Meng’s arrest is one more indication that under Trump the China hawks — in the U.S. Congress, the Justice Department, the intelligence establishment — are succeeding like never before in throttling Huawei. But such victories can only be dangerously counterproductive.

During the anti-American boycott of 1905, Liang spoke fervently of the “sleeping lion” that had been awakened by the indignities inflicted on the Chinese by the United States. Indeed, it was through such humiliations that anti-Westernism became a core component of Chinese nationalism, pushing Chinese leaders into irreversibly hard-line positions.

Today, the China hawks in the U.S. seem to enjoy unrestricted license. But let there be no doubt: They’re poking a lion that is wide awake and increasingly angry. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Pankaj Mishra is a Bloomberg Opinion columnist. His books include “Age of Anger: A History of the Present,” “From the Ruins of Empire: The Intellectuals Who Remade Asia,” and “Temptations of the West: How to Be Modern in India, Pakistan, Tibet and Beyond.”

©2018 Bloomberg L.P.

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