The struggle between the US and China is coming into sharper relief. In the weeks since the arrest of a top executive from telecoms giant Huawei, Beijing has directed pressure at Ottawa – which held her at the behest of Washington, according to their extradition treaty – rather than risk challenging its rival head-on. Now the US has formally confirmed its request and filed criminal charges against Meng Wanzhou and her company, alleging violations of sanctions on Iran and obstruction of an investigation. Separately, the Department of Justice alleges that Huawei stole robotic technology from the US carrier T-Mobile and even offered bonuses to employees who stole trade secrets, in a process outlined in startling detail in the indictment. Huawei denies all charges, and Beijing has attacked the US case as unreasonable and immoral.
The US commerce secretary, Wilbur Ross, has said the legal case is separate from the trade talks due to resume in Washington on Wednesday. (Those are designed to reach a deal before the deadline of early March, when tariffs on $200bn of Chinese products will otherwise rise from 10% to 25%. Despite concerns on both sides, hopes of progress are low.) Yet Donald Trump himself – who is due to meet the Chinese vice-premier Liu He this week – has suggested Ms Meng could be a bargaining chip. Those around him have made it clear that the Huawei case is not only about tackling specific actions by the company, but about checking a rival power that the US believes is advancing largely through bad faith and unfair practices. The US national security adviser, John Bolton, said last week that trade talks were not only about righting the economic balance, but aimed “to prevent an imbalance in political/military power in the future as well”. Meanwhile, Beijing’s aggressive response to Ms Meng’s detention has made it clear just how central Huawei’s success is to the party-state’s ambitions.
At the heart of the confrontation is a critical technological moment: the creation of next-generation 5G computer and phone networks, and Huawei’s role in them. On one side is a China increasingly repressive at home and forceful in international dealings; on the other, an erratic and hawkish US administration. Washington is already applying pressure on potential customers: Britain, as a member of the “Five Eyes” intelligence sharing network, but also Germany, Poland and others. This week Vodafone said it would “pause” the use of Huawei equipment.
The challenge is coming into focus for the UK and others. How well do they understand the nature of the Chinese state and the potential risks of Chinese involvement in sensitive infrastructure? What price will they pay if they say no to Huawei? And can the US, especially under Mr Trump, be counted on to support them? China’s response to the Huawei case – notably the detention of two Canadian citizens, and the death sentence given to another after a highly unusual retrial – has underlined the potential costs. It has also amplified the case for caution.
