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Analysis: China 5G licence issuance trumps US missteps

By Paul Mackintosh   
June 12, 2019

The Chinese government recently issued the first batch of domestic licences to develop 5G mobile technology in the country. The recipients were China Mobile, China Telecom, China Unicom, and the National Radio and Television Administration, which operates the cable-based China Broadcasting Network.

Western players may not have been in line for this wave of licences but other issuances are expected for both domestic and foreign market players, with the latter reportedly including Ericsson, Intel and Qualcomm. This comes, of course, as the US government makes widely-trumpeted moves against Huawei and other Chinese technology companies, citing security concerns and intellectual property (IP) theft. China had been expected to issue the 5G licences later this year; signs are that Beijing moved the issuance earlier to provide further leverage in this developing industrial conflict.

It’s a conflict where the US and its Western followers appear to be in danger of making some serious missteps. Take the IP aspect. With China as the most fertile venture capital market outside the US, the myth that all global telecommunications IP emanates from Silicon Valley, only to be pirated by unscrupulous hangers-on in China, rings more hollow each year.

Denial of access to US markets and technology simply provides incentives to the Chinese to develop their own patents and standards, and to push these internationally. That’s a very dangerous pattern to encourage in a fast-developing global market where China already has a strong record in exports and infrastructure initiatives for other growing economies.

And the security implications? The idea that Western defence infrastructure could be crippled by a Chinese hack into consumer cell phones is as ridiculous as it is disingenuous. Of course, there may be many layers of national infrastructure that should be kept under tight domestic control and monitoring for the sake of national security. But 5G is an international standard, intended to be as ubiquitous as 3G or GSM.

President Donald Trump’s executive order last month making telecommunications a national emergency issue appears to be yet another exercise in bolstering his domestic support base and US paranoia in defiance of economic or technological logic. (Witness the evocation of that old bogey Iran in the US Department of Commerce’s concurrent moves against Huawei.)

Western democracies may have every reason to be concerned about the next generation of telecommunications technology being dominated by state-backed companies answerable to an authoritarian regime. But this is not the way to limit the dangers while fostering competing champions. Trump-era US policy in this area seems as autarkic, grandstanding, incoherent and self-harming as in diplomacy, trade, or fundamental rights.