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China Leapfrogs the U.S. in 5G Internet

In a Dec. 14 op-ed for the Washington Post, former acting CIA Director Michael Morell declared that our present tangle with China is not a trade war but a tech war. If China's flagship telecom equipment company Huawei gets the jump on the rollout of 5G internet, Morell said, China will have the capacity to monitor communications, sabotage industrial systems, and "will have a significant head start economically, in cybersecurity and in signals intelligence -- i.e., in promoting its economy, protecting its secrets and stealing those of its rivals."

That's the least of our problems.

When U.S. intelligence officials argue against the use of Huawei equipment on security grounds, they are in effect asking our allies to buy substitutes from Nokia, in neutral Finland. Just how secure do they expect that to be? No American company still competes in that market. Cisco used to, but abandoned manufacturing in favor of more profitable, less capital-intensive software businesses.

For the past seven years, Huawei executives have traveled the world preaching the benefits of a broadband "ecosystem" -- high-speed connectivity for commerce, finance, as well as manufacturing and transportation. They put on trade show extravaganzas to showcase their plans and loaded their website with details. Fifth-generation Internet, or 5G, will let you download a movie in a few seconds. It will also allow manufacturers to turn every machine, appliance, and vehicle into a "smart" tool through the so-called "Internet of things."

At the beginning of 2018, a National Security Council memo warned: “We are losing. Whoever leads in technology and market share for 5G deployment will have a tremendous advantage towards [ . . .] commanding the heights of the information domain,” the Financial Times reported. That is correct, but it's six years behind the curve. The U.S. revved up a campaign to dissuade its allies from using Huawei equipment well after the Chinese firm positioned itself as the dominant equipment supplier. The U.S. nearly shut down the Chinese handset maker ZTE by banning export of the Qualcomm chips that power its smartphones, in retaliation for ZTE's violation of sanctions against Iran (eventually ZTE paid a multi-billion dollar fine and accepted tight controls). We can't do that to Huawei. After the ZTE business, Huawei started a crash program to make itself self-sufficient in high-performance chipsets. Its Kirin chipset designed by its design subsidiary Isilicon and manufactured by Taiwan Semiconductor can do whatever Qualcomm can do.

American officials were in Berlin last week insisting that Germany keep Huawei equipment out of its networks. Britain, Australia, and New Zealand, which have close intelligence ties to the U.S., acceded to the American request. So far, Germany has brushed off American demands. Earlier today, China Daily reported that Huawei was conducting business as usual in Europe: