Eric Harwit, an Asian-studies professor at the University of Hawaii at Manoa and the author of the book China’s Telecommunications Revolution, argues that Huawei’s fortunes have been damaged by Ren’s inability to schmooze and sell. “You need a Jack Ma who can stand up with Trump and shake hands, and Trump can say you’re a great guy,” Harwit said, referring to the effusive founder of the Chinese e-commerce firm Alibaba. “They don’t have a Jack Ma.”
Compounding Huawei’s woes is a history of suspicious behavior. American companies, including Cisco Systems, have accused Huawei of pilfering their intellectual property. Now comes the Meng case, which, according to Harwit, “puts Huawei in the headlines.”
“You jump from sanctions violations to what kind of company is Huawei overall,” he said. “Are they some kind of evil company that is doing the bidding of the Chinese government no matter what?”
Huawei says it complies with all regulations wherever it operates. And more broadly, the company has never been discovered spying in any country. To an extent, it is having to defend itself against crimes of which there is no evidence. With nearly $93 billion in revenues in 2017, it has also done business successfully with a wide range of countries. Yet distrust of Huawei is spreading. New Zealand and Australia recently barred it from providing the equipment for cutting-edge 5G cellular networks.
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This widening concern about Huawei is representative of increasing wariness of China. The more assertive Beijing has become in pressing its diplomatic and economic goals—from its state-led ambitions to conquer world manufacturing to the sizable expansion of its military capabilities—the more threatening a rising China has appeared. Foreign governments are, in response, standing in China’s path. Both the United States and the European Union have introduced new policies to more carefully scrutinize foreign investments, an effort clearly aimed at keeping high-tech know-how out of Chinese hands. In Malaysia, Prime Minister Mahathir Mohamad recently halted high-profile infrastructure projects backed by Beijing while warning of a new “colonialism.”
In the Huawei case, American security experts fret that in China, where the distinction between state and society is, at best, blurred, intelligence services could and would exploit the company’s equipment, no matter what its executives promise. “Most of it is a China problem, and it’s gotten worse,” William Reinsch, a senior adviser in international business at the Center for Strategic and International Studies in Washington, D.C., said of Huawei’s issues. “If Huawei was an Indian company, I think that the attitude toward it would be very different.”
Thus China and Huawei are in a reinforcing loop of escalating distrust. The difficulties the company is facing in the United States and elsewhere should be a signal to Beijing’s top leadership that it needs to do more to ease fears about its ascent and ambitions. If not, both could find doors closing that they badly need open.