The US war on Huawei: who will prevail?

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Date: 22 - 08 - 2019

Written by / Dr. Ali Mohamed El Khouri

For several months, international observers, especially those concerned with the international economy and technology, have been interested in the successive steps taken by the US government against Huawei and China.

And where did the Chinese reactions and this company specialized in the field of advanced technology go to deal with the great American pressures on it and on China by extension?

The beginning was when Huawei began developing 5G technology in 2009 and has invested great money and efforts since then to develop support for this technology in its smartphones, electronic chips, and communication network devices. In 2017 and 2018, the company invested about $1.4 billion to invest in developing 5G products. Since then, the company has contracted to implement 46 projects to commercially install 5G networks in various countries around the world.

It is worth noting that the fifth generation of communications technology will double the speeds of the devices in our hands to reach unprecedented numbers and speeds, which will allow uses that have not been touched by humans before. It is expected that speeds will reach 100 gigabits per second, which represents about 20 to 100 times the current capabilities of local and international networks, and here lies the importance and danger of these capabilities owned by Huawei, which the US government considered a Chinese threat that will enable China to control the means of communications and networks information, and will consequently pose security, economic and military risks to it and to the world at large.

Huawei realized the intentions of the US government early – when the daughter of the founder of Huawei was arrested in Canada on the background of US accusations of financial irregularities for the company – which prompted it to prepare to form international technical alliances to support its orientations to lead the fifth generation technology, and it sought for this to prepare the company since then for stages in the future that may It finds itself under sanctions that deprives it of the sources of supplying advanced digital chips produced by the American company Intel and the designs for these integrated circuits produced by the British company ARM, despite the partnerships and cooperation between Huawei and these companies and many other companies that constitute an important percentage of the components of the products produced by Huawei.

Huawei has worked to bypass the two most important obstacles resulting from the US sanctions, which are the operating system as an alternative to the famous Android system, and the electronic chips components that it was importing from American companies. Future changes for any business sector that desires continuity and success.

Last week, Huawei announced the imminent launch of the new operating system called Harmony – an open system that allows programmers to deal with it directly and publish their applications globally – an announcement that reassured the company’s customers who purchased its devices, especially mobile phones. Its new system is characterized by specifications that make it much better than the Android system, and is characterized by safer features, less energy consumption, and faster by about 30% than the older system. its own operating. The new system will also provide great capabilities to operate all devices, not only mobile, and will enable developers to convert any previous application on Android to run on Harmony through a simple and uncomplicated software tool called (ARK Compiler).

The Harmony system was designed to operate mobile phones, TVs, digital and self-driving cars and other electronic devices connected to the Internet, as a step to enhance Huawei’s investment in the capabilities of the fifth generation of digital communications, which Huawei has paid great attention and made remarkable progress in, and will open the way for it to have better opportunities to expand applications The Internet of Things is the technology that is central to the development of digital societies and all its components.

And Huawei began to conclude partnerships with companies in China, Taiwan, Japan and South Korea, to produce components (processors) similar to what is manufactured by American companies. For example, but not limited to, Huawei built a factory to manufacture high-speed central server processors last May in Taiwan, and Huawei also changed its relations with existing suppliers, and is moving to contract with other parties ready to defy the US embargo, to provide technological components to cover its needs in addition to investing heavily in This trend.

Perhaps the important question is whether Huawei will be able to bypass US sanctions and continue as one of the largest technology companies in the world, even if it manages to overcome the two main obstacles; of developing a new operating system and finding an alternative to manufacturing technological components?

To answer this question, we must know that Huawei’s sales during the year 2018 alone represented one third of the digital communications network market and that its sales alone of mobile phones amounted to more than 206 million mobile devices, half of which are in China alone, and it ranks second in mobile sales behind Samsung, the Korean company. And after them, the American company Apple comes in third place, which means that it occupies a large volume in the global market that cannot be ignored, whether from companies that supply components or programmers and developers of technical solutions.

Also, many American companies continued their relationship with Huawei, and took advantage of some American legal loopholes to continue to supply and maintain their sales volume in the market, as current US export and re-export laws allow companies even if there is a ban to supply Huawei with products, for example, as long as they are not manufactured in American and contain no more than 25% American ingredients. This situation indicates the unwillingness of many suppliers and developers to abandon the huge demand from Chinese companies in the global digital market.

On the other hand, it is known that China as a country will not leave one of its most important technology companies to suffer alone, especially since the Chinese digital transformation plans are among the most daring and forward-looking plans in the world, which seek to transform more than half of its income to be from digital technology during the next ten years, in addition to that China is already investing in this company and it has a Chinese economic and national security and a backbone on which it depends to achieve its digital and economic strategic vision. So it is likely that China will not let the United States of America hinder the work of its gold company.

Also, major American companies depend on Chinese industry, such as Apple, which invests tens of billions in China and produces many of its products from its factories in China. On the whole world, the symptoms of the current US measures have already appeared in the decline and slowdown of the global economy, which is what many economists warn of.

We believe that the heavy losses that will fall on both sides, whether it is America or China, will be a major reason for the retreat of these American campaigns and sanctions against China and Huawei, and that the language of interest will overcome the language of bullying and dominance. We also see that the position in which this Chinese company stands has exceeded the ability to harm it through punitive measures and a commercial embargo, and that it has reached the strength and knowledge that makes such a measure worthless. Will the US leadership resort to non-commercial measures to stop the Chinese supremacy as a result of the ineffectiveness of its measures to ban Huawei or impose heavy tariffs on China?

As we have clarified, rational estimates indicate that this tension and attraction will eventually lead to a compromise and calm, and there is no alternative to this solution but to fully accept the transfer of the largest economic power to become in the hands of China during the next ten years, or America may be forced to confront China in other non-commercial ways, and this is what Days will reveal it!