America’s war on Chinese technology

The worst foreign-policy decision by the US of the last generation – and perhaps longer – was the “war of choice” that it launched in Iraq in 2003 for the stated purpose of eliminating weapons of mass destruction that did not, in fact, exist. Understanding the illogic behind that disastrous decision has never been more relevant because it is being used to justify a similarly misguided US policy today.

The decision to invade Iraq followed the illogic of then-US vice-president Richard Cheney, who declared that even if the risk of WMDs falling into terrorist hands was tiny – say, 1% – the US should act as if that scenario would certainly occur.

Such reasoning is guaranteed to lead to wrong decisions more often than not. Yet the US and some of its allies are now using the Cheney Doctrine to attack Chinese technology. The US government argues that because we can’t know with certainty that Chinese technologies are safe, we should act as if they are certainly dangerous and bar them.

Proper decision-making applies probability estimates to alternative actions. A generation ago, US policymakers should have considered not only the (alleged) 1% risk of WMDs falling into terrorist hands, but also the 99% risk of a war based on flawed premises. By focusing only on the 1% risk, Cheney (and many others) distracted the public’s attention from the much greater likelihood that the Iraq War lacked justification and that it would gravely destabilise the Middle East and global politics.

The problem with the Cheney Doctrine is not only that it dictates taking actions predicated on small risks without considering the potentially very high costs. Politicians are tempted to whip up fears for ulterior purposes.

That is what US leaders are doing again: creating a panic over Chinese technology companies by raising, and exaggerating, tiny risks. The most pertinent case (but not the only one) is the US government attack on the wireless broadband company Huawei. The US is closing its markets to the company and trying hard to shut down its business around the world. As with Iraq, the US could end up creating a geopolitical disaster for no reason.

I have followed Huawei’s technological advances and work in developing countries, as I believe that 5G and other digital technologies offer a huge boost to ending poverty and other SDGs. I have similarly interacted with other telecoms companies and encouraged the industry to step up actions for the SDGs. When I wrote a short foreword (without compensation) for a Huawei report on the topic, and was criticised by foes of China, I asked top industry and government officials for evidence of wayward activities by Huawei. I heard repeatedly that Huawei behaves no differently than trusted industry leaders.

The US government nonetheless argues that Huawei’s 5G equipment could undermine global security. A “backdoor” in Huawei’s software or hardware, US officials claim, could enable the Chinese government to engage in surveillance around the world. After all, US officials note, China’s laws require Chinese companies to cooperate with the government for purposes of national security.

Now, the facts are these. Huawei’s 5G equipment is low cost and high quality, currently ahead of many competitors, and already rolling out. Its high performance results from years of substantial spending on research and development, scale economies, and learning by doing in the Chinese digital marketplace. Given the technology’s importance for their sustainable development, low-income economies around the world would be foolhardy to reject an early 5G rollout.

Yet, despite providing no evidence of backdoors, the US is telling the world to stay away from Huawei. The US claims are generic. As a US federal communications commissioner put it:

“The country that owns 5G will own innovations and set the standards for the rest of the world and that country is currently not likely to be the United States.”

Other countries, most notably the United Kingdom, have found no backdoors in Huawei’s hardware and software. Even if backdoors were discovered later, they could almost surely be closed at that point.

The debate over Huawei rages in Germany, where the US government threatens to curtail intelligence cooperation unless the authorities exclude Huawei’s 5G technology. Perhaps as a result of the US pressure, Germany’s spy chief recently made a claim tantamount to the Cheney Doctrine:

“Infrastructure is not a suitable area for a group that cannot be trusted fully.” He offered no evidence of specific misdeeds. Chancellor Angela Merkel, by contrast, is fighting behind the scenes to leave the market open for Huawei.

Ironically, though predictably, the US complaints partly reflect America’s own surveillance activities at home and abroad. Chinese equipment might make secret surveillance by the US government more difficult. But unwarranted surveillance by any government should be ended. Independent United Nations monitoring to curtail such activities should become part of the global telecoms system. In short, we should choose diplomacy and institutional safeguards, not a technology war.

The threat of US demands to blockade Huawei concerns more than the early rollout of the 5G network. The risks to the rules-based trading system are profound. Now that the US is no longer the world’s undisputed technology leader, US President Donald Trump and his advisers don’t want to compete according to a rules-based system. Their goal is to contain China’s technological rise. Their simultaneous attempt to neutralise the World Trade Organisation by disabling its dispute settlement system shows the same disdain for global rules.

If the Trump administration “succeeds” in dividing the world into separate technology camps, the risks of future conflicts will multiply. The US championed open trade after World War II not only to boost global efficiency and expand markets for US technology, but also to reverse the collapse of international trade in the 1930s. That collapse stemmed in part from protectionist tariffs imposed by the US under the 1930 Smoot-Hawley Act, which amplified the Great Depression, in turn contributing to the rise of Hitler and, ultimately, the outbreak of World War II.

In international affairs, no less than in other domains, stoking fears and acting on them, rather than on the evidence, is the path to ruin. Let’s stick to rationality, evidence, and rules as the safest course of action. And let us create independent monitors to curtail the threat of any country using global networks for surveillance of or cyber warfare on others. That way, the world can get on with the urgent task of harnessing breakthrough digital technologies for the global good. BM