The departure of the China
hawk might clear the way for a trade-and-technology deal
SPENGLER
President Trump needs a trade
deal with China as quickly as possible to avert a sharp slowdown of the US
economy, as recent
polls have made clear. There won’t be any deal unless the US finds
some way to walk back its efforts to keep China’s top telecommunication firm
Huawei out of world markets. The summary dismissal today of National Security
Adviser John Bolton increases the prospects of a deal, although the immediate
motivation for Bolton’s departure most likely lies elsewhere.
China and the United States
seemed on track for a trade deal in early December 2018 when XI Jinping and
Donald Trump dined on the sidelines of a summit meeting in Buenos Aires –
except that Canada arrested Huawei CFO Meng Wangzhou at the Vancouver Airport.
Trump didn’t know about the arrest, but his national security adviser John
Bolton did, as Bolton later said in a radio
interview.
A few weeks earlier, the US
government began a campaign to persuade its allies to exclude Huawei from the
rollout of 5G broadband networks, as the Wall Street Journal first
reported Nov.
23, 2018. The Meng Wanzhou arrest, the first use of extraterritorial powers
in the case of an alleged sanctions violation, was a declaration of war on the
Chinese national champion. In the ensuing months, the United States banned US
technology firms from supplying components and software to Huawei and demanded
that its allies boycott its 5G network systems.
All of the presidential orders
targeting Huawei were drafted by Bolton’s staff at the National Security
Council offices in the Executive Office Building next to the White House.
Trump’s national security adviser didn’t devise the campaign against Huawei, but
he represented the views of the US intelligence community to the White House
and helped formulate the rationale for the effort to derail Huawei’s market
leadership. Huawei, the US government alleged, might build secret back doors
into its routers and steal data, compromising the cybersecurity of any country
it supplied. So dangerous was Huawei, US officials
alleged, that the US might cut back on intelligence sharing with such
countries.
This in my view was a willful
deception on the part of America’s spies, intended to distract attention from a
different sort of problem. I do not believe that Ambassador Bolton set out to
deceive anyone, but it seems likely that he was captured by the intelligence
community’s agenda. As I wrote in Asia Times July
7:
The US intelligence
community’s alarm at Chinese leadership in 5G mobile broadband has less to do
with a threat of Chinese eavesdropping than with the likelihood that electronic
eavesdropping will become next to impossible, thanks to quantum cryptography. I
have had a number of conversations on the topic with US as well as Chinese
sources, but this conclusion appears obvious from public sources.
America’s intelligence
community spends nearly $80 billion a year, including $57 billion for the
National Intelligence Program and $20 billion for the Military Intelligence
Program. Signals intelligence (SIGINT), mainly electronic eavesdropping, takes
up the lion’s share of the budget. Among other things, the National Security
Agency recorded more than half a billion calls and text messages of Americans
in 2017.
In response to a Freedom of
Information Act lawsuit by the American Civil Liberties Union, the National
Security Agency admitted – for the second time — that it improperly
eavesdropped on Americans. The spooks’ ability to tap the conversations of
prospective terrorists, foreign leaders like Germany’s Angela Merkel and pretty
well anyone it wants is a source of enormous power as well as justification for
continued funding.
In the meantime, America’s
efforts to suppress Huawei have taken on a life of their own. In the Wall
Street Journal today, financier George Soros, a bitter political enemy of
President Trump, demanded to know if Trump will “sell out the US on Huawei” by
including the technology issue in an overall trade deal. Soros wrote, “China is
a dangerous rival in artificial intelligence and machine learning. But for now
it still depends on about 30 U.S. companies to supply Huawei with the core
components it needs to compete in the 5G market. As long as Huawei remains on
the entity list, it will lack crucial technology and be seriously weakened…
However, President Trump may soon undermine his own China policy and cede the
advantage to Beijing.”
I do not think that the ban on
exports of US components to Huawei will slow down its efforts in 5G broadband.
With few exceptions, these components are easily sourced elsewhere, and China
has had a blank check program to eliminate dependence on US technologies since
March 2018, when the US banned sales of handset chips to China’s ZTE.
Still, it is odd to find the
liberal Mr. Soros attacking President Trump, as it were, from the right. The US
Establishment wants to throw whatever monkey-wrenches it has into the works in
the hope of delaying Huawei long enough to figure out what it wants to do next.
It doesn’t appear to be working. Last week Deutsche Telekom became the latest
European country to inaugurate 5G networks using Huawei equipment.
Morris Lore reports at lightreading.com,
“Before Deutsche Telekom’s 5G launch, Three, Vodafone and BT-owned EE had all
turned on Huawei-built 5G networks in the UK, despite government indecision on
the future role of Chinese suppliers. Vodafone is also using Huawei’s equipment
to support 5G services in Italy, Romania and Spain, explaining why it has been
Europe’s most vociferous opponent of the anti-Huawei campaign. Elsewhere,
Huawei is live in Switzerland and Finland, where it equips Sunrise and Elisa
respectively.”
To America’s great
embarrassment, the whole of Eurasia has ignored its imprecations against
Huawei. Bolton’s high-profile campaign, joined by Secretary of State Mike
Pompeo, has failed, and President Trump doesn’t like to fail.
Bolton is quite the China
hawk. In January 2018, three months before he took office, he argued in the
Wall Street Journal that the US should station troops in Taiwan. China is glad
to see the back of him. Global Times editor Hu Xijin tweeted, “Bolton has never
played a positive role on China issues either, although it won’t be the reason
why he was fired. I believe people who hold extreme political stance are
paranoid and difficult to get along with. The news of Bolton being fired likely
drew applause in the White House.”
Just what form a
trade-and-technology deal might take is far from clear. The US cannot simply
let the Huawei matter drop, but it might agree to comprehensive testing and
screening of Huawei products. Huawei founder Ren Zhengfei told New York Times
columnist Thomas Friedman that Huawei is “open to sharing our 5G technologies
and techniques with US companies so that they can build up their own 5G
industry.” He added that American companies can “change the software code. In
that case, the US will be assured of information security.”
In short, Huawei has offered
to call the American bluff about its purported data theft and open its
proprietary technology to American inspection. The intelligence community and
the China hawks, in general, will not like that, and Bolton’s departure removes
one hawk from a particularly important nest.
My view is that Huawei’s
dominance of a game-changing technology does indeed present a threat to the
United States, but that John Bolton’s weasel war dance won’t do the United
States any good. If the US wants to maintain technological superiority, it has
to create national champions that can best Huawei, and that requires a massive
commitment of federal R&D funding. In the meantime, President Trump may
have to compromise with China to avoid a recession and defeat in the 2020
elections.
[note from vanishingmediator:
Trump will not prevent recession, but he may be re-elected before it hits. Support
Bernie Sanders! (https://secure.actblue.com/donate/bern-site?refcode=splash-top-right)]
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