Americans and Chinese are coming for your phone

MAY 26 — Your phone is now on the front lines of a struggle for global dominance.

The US government’s actions in terms of banning US companies from doing business with Huawei has made this quite clear.

President Trump’s executive order means that Huawei will need licences to buy US technology products and these products in the form of US microchips and fundamental systems, like Android, are vital to Huawei’s business. 

The US hasn’t made clear the reason for the measures — broadly citing national security and accusations that Huawei has been stealing US technology — but the fundamental accusation seems to be that Huawei’s technology, both in terms of mobile devices and particularly 5G networking technology, is a potential backdoor for the Chinese government and therefore a security risk. 

The larger context is that the US and China have been involved in a protracted trade dispute imposing billions of dollars of tariffs on each other’s exports. 

What is clear is that the world’s largest (US) and second largest (China) economies are in open conflict in the fields of trade and geopolitical influence. 

As the conflict escalates, the US is being quite explicit about the fact that information is power and that anyone who controls information is a potential threat.

Of course, phones and mobile networks have huge amounts of information. 

It’s not just about who makes the phones, it’s about the chips inside the phone and the platform and the network it runs on.

Traditionally, US companies or companies from countries allied to the US have controlled virtually all the world’s networking and information technology systems.  

But China’s Huwaei has been rising — the world’s second largest maker of mobile phones and a world leader in 5G networking technology. 

It seems the US is no longer willing to countenance and support this rise.   

The reality is that US microchips and platforms like Android power Huawei’s mobile phones; without these components, a phone isn’t really going to be much more than a paper weight. 

By cutting off Huawei’s access to these technologies, the US is flexing its economic muscles... reminding China of its overwhelming dominance in fundamental technologies.

Just about every major producer of processors and advanced microchips in the world is American — Intel, AMD and Qualcom — and without support from them, Chinese factories would struggle to produce computers, phones or anything else.

It would appear therefore that the US can exert strong leverage over China and its companies and this may force the People’s Republic to the trade negotiating table and also eventually freeze Huawei out of global 5G networking deals. 

In the short term, there’s a clear advantage to the US but in the long term the US seems to have set the stage for a protracted conflict as damaging to the US as anyone else. 

For years, we lived in world where products and systems have been dependent on components and supply chains from across the world. 

Singapore and Malaysia have benefitted hugely from the rise of these global supply chains.

But in the wake of the US exercising its right to withdraw technology from potential rivals, we will inevitably see a push from China to ensure its companies are more self-reliant. 

And it’s not just China. Any country or company that doesn’t want to feel concerted pressure from the US may now need to look at greater self-reliance. 

In effect, global supply chains may start to break down and once nations become less reliant on each other they become more able to escalate conflicts.

Which makes things more dangerous and unpredictable for all of us. 

*This is the personal opinion of the columnist.

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