In 2019 the White House announced that telephone and internet equipment from Chinese technology companies should be removed from every corner of the US because it poses an unacceptable risk of surveillance or sabotage by the Chinese government.
More than three years later, most of this equipment remains.
Today I’m going to look at how the US has handled the equipment of two Chinese companies, Huawei and ZTE. I will consider what this can tell us about America’s ability to deal effectively with concerns about other Chinese technologies, such as Apps like TikTokand his efforts to become more self-sufficient in a computer chip manufacturing and design.
Technology will no longer be America’s near-monopoly, as it has been for the past half century, and the US must develop and implement plans to help it capitalize on global technological developments while keeping America safe and innovative. But the history of Chinese equipment shows that we still have a long way to go.
Some US officials believe that the continued use of equipment from Huawei and ZTE is a serious problem. the threat for America’s national security. Other policy experts I’ve spoken to say this poses little risk and that it might not be worth trying to remove all the equipment at once.
What is clear is that the US said the ban on Chinese technology was urgent but failed to stick to it.
Removing Huawei and ZTE equipment, which is used primarily in rural areas of the US, will never be easy, and pandemic-related complications have made matters worse. But critics of the US approach also said the way officials handled it hurt American businesses and consumers, but did not make the country much safer.
Let me go back to how it all started. For nearly a decade, U.S. officials have repeatedly stated that telephone and Internet equipment from Huawei and ZTE can be used as gateways for Chinese government spying on or disrupting important US communications. These warnings have convinced major US telephone and Internet companies such as AT&T and Verizon to refrain from buying such equipment.
Nearly everyone in the US government and business community dealing with this issue says they did the right thing. (There is less consensus on the appropriateness of restrictions on Huawei smartphones.) Huawei and ZTE have consistently stated that these security concerns were unfounded and that the US government has never provided public proof of their claims.
Smaller companies, mostly in rural areas, were not as strongly discouraged from buying Huawei and ZTE equipment. A significant minority of them continued to buy goods from companies, such as devices similar to home Internet modems and equipment for transmitting mobile signals.
The US government said it was too big a risk. Starting in 2019, the US effectively ordered all companies with Huawei and ZTE equipment to replace it all. The government has pledged taxpayer money to help pay for comparable equipment from American or European companies.
The FCC once estimated the cost of replacing Chinese equipment be about 2 billion dollars. Updated estimate disclosed last month showed what it was about $5 billion. It will take time for the FCC and Congress to figure out how to pay the amounts they say small telcos need. Meanwhile, many such providers have not even begun replacing Huawei and ZTE hardware, according to Politico. informed last month.
There are many indications of how this happened. Congress mandated small companies and then didn’t go through with the money. US officials chatted about what types of Huawei and ZTE equipment should be replaced. The delay and confusing official announcements slowed the process down.
Naomi Wilson, an Asia policy specialist at ITI, a trade group for US technology and telecommunications companies, told me that early equipment replacement estimates were best guesses that turned out to be far too low. Inflation, supply chain issues and the trade war between the US and China have pushed up the price.
One big question is whether this drama could have been avoided. I asked Paul Triolo, senior vice president for China at Albright Stonebridge Group, a strategy firm, if the US had a good plan with shaky execution, or if the strategy was flawed from the start. He said a little bit of both.
Triolo said the US government could ditch Huawei and ZTE equipment for years – similar to Britain’s an approach — and accelerated removal of some types of Chinese equipment or equipment near important locations such as military installations. While the US has said it needs to quickly address the risk associated with the equipment, it all remains in place anyway, he said.
Triolo and some other China policy experts I spoke to are concerned that America’s approaches to Chinese technology not always effective or targeted to the right things.
The US is also concerned that TikTok or other apps made by Chinese companies may be pumping sensitive data about Americans or spreading Chinese government propaganda. Politicians have not yet figured out how to solve these problems and have not made much progress in China’s ruthless cyberattacks on US government agencies and companies.
Officials do not always have consistent messages about creation of domestic computer chip industry resist China. And if the US wants American technology to stay strong, it could do more to support the immigration of technicians or cancel Chinese tariffs which hurt the Americans.
Theoretically, the US could do all of this. Officials could shield the country from potential external dangers and devote the time, money, and intelligence needed to support the best American innovation policy. Instead, we have bits and pieces that don’t add up to much yet.
Read past On Tech newsletters on how the US is responding to Chinese tech:
Before we go…
Taiwan manufactures the most important electronic devices on Earth: My colleagues Paul Mozur and Raymond Zhong explained why advanced computer chips were part of the backdrop of Speaker Nancy Pelosi’s controversial visit to Taiwan this week.
There is no easy recipe for internet fame and fortune: The how-to courses suggest that people can become famous online by paying freelancers to put out a YouTube video with similar elements, such as an invisible narrator, a catchy headline, or a top 10 celebrity list. My colleague Nico Grant informed that this “can’t lose” sentence can definitely lose.
She makes a living roasting guys online. Drew Afualo makes some of the most popular TikTok videos, verbally abusing people for being racist, fatphobic and misogynistic, Bloomberg News reports. informed. (Subscription may be required.)
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