The U.S. Must Offer a Substantive 5G Alternative to China’s Huawei – The National Interest Online

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To maximize commercial output, encourage economic development, and introduce the newest industrial capabilities, ranging from agriculture to medicine, countries across the world are seeking access to the best information and communication technologies (ICT) that can accelerate economic development and safeguard national security.

Central to this process are fifth-generation mobile networks, or 5G, which promise increased bandwidth, lower latency, greater interconnectivity across platforms, and faster network times. Without domestic 5G providers, Southeast Asian, Middle Eastern, and African countries look abroad to procure and integrate this technology into their economies. Herein lies a great technological power competition between China and the West. If the United States is unable to provide competitive 5G alternatives to the financially attractive offers recently extended by Chinese company Huawei, the West risks losing its technological superiority and credibility to China.

In the same way that the United States has been convincing countries across the globe that Beijing’s increasing penetration into their financial and political institutions fuels its quest to erode freedom within the current rules-based international order, Washington must make the same effort on the technological front. This is ultimately the sphere that will play the most decisive role in shaping countries’ political inclinations, economic development, and educational opportunities. The fundamental challenge, however, lies in demonstrating to these countries that choosing the Chinese path to obtain this technological growth is prejudicial in the long run.

The argument is especially difficult to make when Beijing provides impressive short-term results. Malaysia is a case in point. It is one of many Southeast Asian countries that takes an open and global approach as it strives for technological development. It is willing to work with a variety of partners and does not draw distinct lines between the repressive tools deployed by China and the privacy-based alternatives offered by the West. Last year, for instance, Malaysia signed a memorandum of understanding (MoU) with China on 5G digital cooperation intended to facilitate information sharing between both countries. This came after Swedish vendor Ericsson built its first state-owned 5G network after the company was awarded $2.5 billion.

Malaysia keeps its options open. This applies to its preeminent companies in the technological sector as well. For example, Ericsson signed its own MoU with one of Malaysia’s leading telecommunications and research accelerator companies with the aim of sending resources directly to businesses and private industry. However, Chinese companies have not remained inert while these processes move forward. To dissuade Malaysia from receiving training, infrastructure, and capabilities from European companies, Huawei is developing more advanced tools and applying forceful economic pressure. It tried to make Malaysia reopen the selection process to invest in 5G infrastructure by combining its influence in the region with forceful lobbying tactics.

The West’s strategy in response to these bellicose strategies has been to cite the national security concerns that emerge when working with Chinese companies. U.S., UK, and EU government envoys contended to Malaysian officials that they should not reopen the negotiating process. Brian McFeeters, the U.S. ambassador to Malaysia, wrote that Huawei’s rival network would expose the country’s “infrastructure to national security risks.”

As the Belt and Road Initiative makes all too clear, a good business deal almost always trumps such security concerns. One of Malaysia’s 5G providers, Digital Nasional Berhad (DNB), could benefit from having a second 5G vendor that would reduce costs and accelerate the implementation of 5G nationwide. In addition, this would prevent Malaysia’s telecommunications infrastructure from having a single point of failure if one of the providers faces a network problem. In other words, Huawei would combat monopolization while providing citizens with access to fast connections. But perhaps most importantly, it would be cheaper for developing countries.

Working With China Offers Risk, But Alternatives Are Few

Malaysian officials are surely aware of the national security risks entailed by cooperating with a China-backed company, given anti-Huawei actions taken by other countries in the region. In 2019, Australia banned Huawei from installing 5G equipment in the country due to fears that the company would be able to shut down key national security infrastructure. New Zealand did the same, citing similar concerns. Officials from Tonga, the site of several Huawei telecommunications facilities, asked Beijing to forgive their country’s loan debts stemming from heavy technological investment—to no avail.

Since there is no independent judiciary that stands between Chinese private companies and the Chinese Communist Party, the government’s ideological objectives can override the security guarantees provided by industry regarding the management of data through 5G cables and infrastructure. As explained by Robert Strayer, the State Department’s Deputy Assistant Secretary for Cyber and International Communications and Information Policy from 2017 to 2021, China’s national intelligence law allows it “to mandate that vendors like Huawei and ZTE comply with mandates of their intelligence and security services without an independent judicial review,” which opens the door to unregulated data abuses.

The problem is that American and European companies offer few affordable 5G replacements, leaving many countries with no other option besides Huawei. As a result, 2022 was a year of monumental victories for China. Leading 5G operators in Turkey and Brazil signed MoUs with Huawei. In Thailand, the Chinese company hosted the 2022 5G Summit to become an industry leader in 5G deployment two years after establishing a research center there. Huawei signed an MoU with a leading Indonesian telecommunications company to develop a “smart city” driven by 5G networks, building on similar projects completed across the Middle East. In early 2022, Huawei was one of several stakeholders in completing the multi-continental PEACE cable, connecting Singapore, Pakistan, Kenya, Egypt, and France to the Maldives and Malta.

American agencies report on the national security repercussions of the United States lagging behind on 5G technologies, but policy solutions do not accompany these discussions. For instance, Strayer noted in 2019 that there are no American vendors of radio access networks (RAN) that connect end-user devices to the cloud and make the 5G network transformation possible. In January 2021, the National Telecommunications and Information Administration (NTIA) wrote that the Cybersecurity and Infrastructure Security Agency (CISA) conducted an economic analysis of the 5G RAN market and determined that establishing R&D grants to support RAN supply chain innovation would advance U.S. interests. However, it added that “further analysis is necessary to determine which policy options would be the most effective in terms of ensuring an adequate supply of trusted RAN equipment to meet United States demand.” In other words, the policy that will address American shortcomings in 5G and open RAN is still in its early stages.

Slow Response From Washington

Washington’s efforts to remain competitive with Huawei have been limited to its closest allies. In other words, although the United States has undertaken some laudable initiatives to use open RAN as a substitute for Huawei, it has mostly only gotten countries that oppose China on board. Africa and Southeast Asia have generally been left behind because it is harder for Washington to make the case to countries that have signed onto projects like the Belt and Road Initiative (BRI) that it is dangerous to use Chinese equipment.

When Asian and African countries ranging from Indonesia, Cambodia, and Thailand to South Africa, Kenya, and Uganda have historically found themselves on the fence as to whether they should accept Western or Chinese loans, they have leaned heavily toward the latter. Feasibility studies, declarations of intent, and warnings about Chinese national security threats can only go so far because of the competitive offerings presented by Chinese 5G companies. Perhaps this is why Indonesia’s Communication and Information Minister announced in September that Jakarta is open to 5G investment cooperation “with industry pioneers such as China Mobile” at a Cooperation Conference sponsored by the Chinese company. Indonesia has not closed the door to the United States but finds it unlikely that American companies will be able to rival their Chinese counterparts.

This is not to say that Washington has given no attention whatsoever to this technological competition. For example, American companies have been working with their Japanese and Australian counterparts to build 5G networks in the Pacific. In January 2023, the U.S. government provided a grant to study whether the development of a secure nationwide 5G mobile network would be feasible in the Philippines. Following pressure from the United States, European countries like Germany and the Netherlands have gradually cut their ties with Huawei. Last year, the Biden administration launched a $1.5 billion application-based innovation fund to develop and diversify the global telecommunications supply chain.

The United States government must coordinate with European telecommunications companies like Ericsson to propose 5G joint initiatives with middle powers in Asia, the Middle East, and Africa. If such coordination is bypassed, American companies may propose Open RAN opportunities that undercut their European partners. The United States, benefitting from high 5G availability domestically, should work with European companies to provide affordable and secure options to countries aiming to revolutionize multiple sectors of their economy through a 5G lens.

Available Inroads for Washington

When reaching out to African and Southeast Asian countries, the United States must be prepared to assist companies across a variety of sectors and with different levels of experience with technological integration. In Malaysia, companies are considering how agriculture, education, health care, manufacturing, transportation, and tourism can be reshaped by 5G implementation, and the United States can play a role in this development. Although 5G coverage has reached 59.9 percent of Malaysia’s population, the country only has a 3.1 percent adoption rate as of June 2023, leaving space for Western inroads. Similarly, 5G commercial trials are still in their early stages in Vietnam. Tanzania is an example of a country that opted for a dual-vendor model for implementing 4G and 5G since its principal telecommunications company has partnered with European and Chinese counterparts, meaning that there is an additional incentive to channel resources toward deploying expanded coverage there.

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