The Economist on how to handle a problem like Huawei

The Economist has a strong leader today on the US vs Huawei/China.

It argues well that the counts laid out in Monday’s indictment were missing one big thing: a smoking gun that proves that Huawei could be used to spy on Americans:

Rumours of this have circulated for years without any public evidence (including this week), but it makes sense to be wary. Huawei has a high market share in new 5G networks, which will connect everything from cars to robots. The networks’ dispersed design makes them hard to monitor. And China’s leaders are tightening their grip on business, including firms such as Huawei in which the state has no stake. This influence has been formalised in the National Intelligence Law of 2017, which requires firms to work with China’s one-party state.

But, despite considerable effort, the US hasn’t been able to pin anything related to surveillance on Huawei.

This is massive problem, though an arguably smaller one than if it had, and was moved to ban US firms from doing business with Huawei. That would almost certainly, The Economist writes, put China’s biggest tech firm out of business. Beijing would have no option but to retaliate.

Supply chains would be wrecked, at least 180,000 jobs would go, mainly in China, and customers would have less choice. On January 29th an Australian operator deprived of Huawei gear abandoned plans for a new 5G network. But the greatest cost would be a splintering of the global trading system.

I predict this issue to move way beyond Huawei this year. Just this week, an Apple engineer was arrested after he was spotted taking pictures in a secure area:

Apple began investigating Jizhong Chen when another employee reported seeing the engineer taking photographs in a sensitive work space, according to a federal criminal complaint unsealed this week.

Chen, according to the complaint, allowed Apple Global Security employees to search his personal computer, where they found thousands of files containing Apple’s intellectual property, including manuals, schematics, and diagrams. Security personnel also found on the computer about a hundred photographs taken inside an Apple building.

Apple learned Chen recently applied for a job at a China-based autonomous vehicle company that is a direct competitor of Apple’s project, according to the complaint.