In theory at least it’s a legitimate concern: A congressional committee has published a report that essentially accuses Huawei and ZTE of being agents of the Chinese government that might be embedding spyware and other forms of malicious code inside products they sell to companies in the U.S.
Unfortunately, the evidence provided in the report to support these charges won’t stand up in any court. So what we have is an incendiary report that accuses two companies of espionage acts that are to one degree or another being carried out by just about every government on the planet. What’s not at all clear is what role companies are playing in that process, or if the management teams at those companies are aware of whether some of their employees may have ties to agencies that are trying to steal information on behalf of one government organization or another. In the case of Huawei and ZTE, the Chinese government, as expected, adamantly denies any involvement.
Governments around the world, including the U.S., regularly engage in stealing intellectual property. Sometimes it’s overt, while other times it’s about turning a blind eye, such as when Eli Whitney stole the plans for building the cotton gin from companies in England. Despite these issues, global trade has increased over the decades much to the benefit of most everyone involved.
But because of legitimate concerns over the theft of intellectual property and government secrets, all of that trade is now being put at risk. While banning companies such as Huawei and ZTE might ultimately benefit companies such as Cisco, those gains are just as likely to result in the banning of a few U.S. companies from the Chinese market. It doesn’t take much to see how this might all quickly spiral out of control, especially when you consider how many U.S. products are actually dependent on components and parts manufactured in China.
Right now, major Chinese companies doing business in the U.S., as David Roman, chief marketing officer for Lenovo, puts it, are trying to lay low given the trillions of dollars at stake. Hopefully, cooler heads will soon prevail. Unfortunately, the level of China bashing emanating from politicians these days is setting the stage for nothing less than mutually-assured economic destruction for all. That’s not to say that safeguarding secrets is not a major issue, or that violating trade agreements by low-balling prices is something to be ignored. But it’s clear that given the current level of economic dependency between the U.S. and China, a lot more care should be given towards how to manage a set of issues that, quite frankly, a random Congressional committee report based largely on rumor and innuendo is never going to be able to adequately address.