Making Huawei Stronger
The June 15 issue of The Economist had the following headline and subhead:
America’s assassination attempt on Huawei is backfiring
The company is growing stronger—and less vulnerable
But if the allusion to Nietzsche was ill-timed, the story itself contains some important insights:
America’s assault continues. In May, for instance, regulators revoked a special permit allowing Intel and Qualcomm, two American tech groups, to sell Huawei chips for laptops. Yet Huawei has not just survived; it is thriving once again. In the first quarter of this year net profits surged by 564% year on year to 19.7bn yuan ($2.7bn). It has re-entered the handset business. Its telecoms-equipment sales are rising again. And it has achieved this in large part by replacing foreign technology in its wares with home-grown parts and programs, making it much less vulnerable to American hostility in future. Having failed to kill Huawei, Uncle Sam’s attacks have only made it stronger.
Foreign Affairs also has an excellent piece on trade relations with China:
A China that is increasingly cut off from Western markets will have less to lose in a potential confrontation with the West—and, therefore, less motivation to de-escalate. As long as China is tightly bound to the United States and Europe through the trade of high-value goods that are not easily substitutable, the West will be far more effective in deterring the country from taking destabilizing actions. China and the United States are strategic competitors, not enemies; nonetheless, when it comes to U.S.-Chinese trade relations, there is wisdom in the old saying “Keep your friends close and your enemies closer.”
One advantage of globalization is that it makes countries much more interdependent. If your well-being depends on interactions with countries all over the world, you might be less inclined to engage in hostile behavior that puts those supply chains at risk. Once cut off from the rest of the world, there is little incentive to avoid reckless behavior, as we see in places such as North Korea.
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