China's IT companies have only been able to grow so fast because their US rivals weren't allowed a look in. DW's Frank Sieren writes that Donald Trump's Huawei ban is an understandable, but shortsighted, response.
It's hardly surprising that US President Donald Trump decided to blacklist Huawei. In 90 days, the Chinese telecoms giant will no longer be allowed to buy technology from US companies. Huawei smartphones still use Google's mobile operating system, Android. But, without a license, Huawei will no longer be able to install updates. New phones will no longer be able to access the Google Play Store, which allows users to download apps, music, films, books, etc. This might not a big problem in China, but it will be a major headache for Huawei's customers abroad.
If no agreement is reached in the next three months — which is very likely — the US chip manufacturers Qualcomm and Intel and Germany's Infineon Technologies might not be allowed to supply Huawei.
Whatever happens, however, Trump's drastic measures will not spell the end for Huawei. They won't even cause international isolation.
5G market leader
Huawei is the world's biggest supplier of network infrastructure and well ahead of the competition when it comes to 5G technology. Huawei smartphones are also hard to beat in terms of value for money. This is perhaps why so far only Australia and New Zealand have given in to US pressure not to use Huawei network technology at all. Even Germany and Britain have left their markets open to Huawei, albeit with restrictions. Only the US has blocked the sales of Huawei phones at home.
Trump clearly wants to put the brakes on China's technological and economic rise. The US does not want to share its world power status with any other country. The US government has not been able to prove that Huawei really poses a security risk, which is largely just a pretext. Huawei has come into focus because it is the first Chinese IT giant to really make it internationally.
No panicking at Huawei
There has been no panicking at Huawei. The company was apparently prepared for such a scenario and has already developed its own operating system. The company already makes a large part of the chips that it uses. Ren Zhengfei, the 74-year-old founder of the company, said that the US had underestimated Huawei and they were prepared: "We can't be isolated from the world."
This is certainly true. Even though foreign network systems are not banned in China and Samsung and Apple are able to sell their phones without restrictions, Huawei has not only managed to conquer the Chinese market, but large parts of the global market too. After Samsung, it is the world's biggest maker of telephones. In China, the world's largest growing market, the balance of power is changing dramatically. Last year, Apple sold 13% fewer phones while Huawei sold 16% more. Huawei has 27% of the market — three times more than Apple.
But Trump has one good argument going for him: China did cut off its market from Google, Facebook, Twitter and WhatsApp so that Alibaba, Baidu and WeChat could flourish. Nevertheless, Trump's current strategy is shortsighted. Instead of making Huawei as dependent as possible on the US market and then imposing certain conditions, he is doing the opposite and pushing China to become as little dependent on the US market as possible. China did the opposite with Germany's car industry, encouraging companies to sell their cars so it could have a say in the future. Volkswagen now sells 40% of its cars in China and has to listen to Beijing too. Huawei on the other hand will be able to just shake off the US restrictions and go its own way.
Iron curtain 2.0?
There is already talk of an Iron Curtain 2.0, a future world order in which there would be two separate digital systems. Maybe Baidu cars with Huawei technology will conquer the market on one side of the curtain, while Tesla cars with Google will dominate the other.
The problem for the US is that China is already well ahead when it comes to these new technologies. It also has a bigger market with more access to data than the US and better conditions for mass production.
This is why many countries are refusing to give in to the US and follow its ban on Huawei technology. Trump is currently isolating the US and cutting it off from new important technologies. Asia, Africa and Latin America don't want to follow suit. Luckily, Europe is becoming more independent too.
Frank Sieren has lived in Beijing for over 20 years.