In the year In 2019, the White House said that phone and internet equipment from Chinese tech companies must be ripped from any corner of the U.S. because it poses an unacceptable risk of embarrassment or sabotage to the Chinese government.
After three years, most of the equipment remains.
Today I will look at how the US has handled the devices of two Chinese companies, Huawei and ZTE. I explore what this might tell us about America’s ability to effectively deal with threats from other Chinese technologies, such as TikTok, and its efforts to become self-sufficient in computer chip manufacturing and design.
Technology is no longer an American monopoly, as it was half a century ago, and the US must plan and act to benefit from global technological advances while protecting American security and innovation. But the history of China’s equipment shows that we have a long way to go.
Some US officials believe that the use of Huawei and ZTE equipment is a major threat to US national security. Other policy experts I’ve spoken with say it poses an insignificant risk and that trying to remove all weapons immediately may not be worth it.
What is clear is that the US said the Chinese tech ban was urgent and then stuck to it.
Getting rid of Huawei and ZTE devices, which are mostly used in rural America, won’t be easy, and complications related to the outbreak have made things worse. But the way officials, who are critical of the U.S. approach, are handling the issue hurts American businesses and consumers without making the country safer.
Let me go back to how this all started. For nearly a decade, U.S. officials have repeatedly said that Huawei and ZTE phone and Internet equipment could serve as a gateway for Chinese government espionage or disrupt important U.S. communications. Those warnings have convinced big U.S. phone and Internet companies like AT&T and Verizon to shy away from buying these devices.
Almost everyone in the US government and business community working on this issue says that was correct. (There is little consensus on the wisdom of restrictions on Huawei smartphones.) Huawei and ZTE have repeatedly said these security concerns are unfounded and the US government has not publicly substantiated the allegations.
Smaller companies, mostly in rural areas, are not that discouraged from buying Huawei and ZTE devices. Quite a few continue to buy products from the companies, such as devices similar to home Internet modems and to pick up cell phone signals around.
The US government has declared this very dangerous. In the year Starting in 2019, the US ordered all companies with Huawei and ZTE gear to replace them. The government has pledged taxpayer money to pay for comparable equipment from US or European companies.
The Federal Communications Commission once estimated the cost of replacing Chinese gear at $2 billion. An updated estimate released last month put it at about $5 billion. It will take time for the FCC and Congress to figure out how to pay the amount that small telecom companies say they need. Meanwhile, Politico reported last month that many such vendors haven’t even begun to replace Huawei and ZTE devices.
There is a lot of finger pointing as to how this happened. Congress gave orders to small companies, then did not follow through with the money. US officials are debating which Huawei and ZTE devices should be replaced. Delays and muddled official messages slowed down the process.
Naomi Wilson, an Asia policy expert at ITI, a trade group for US technology and telecommunications companies, told me that the initial estimates for replacing the equipment were very low estimates. Inflation, supply chain problems and a trade war between the US and China have driven up prices.
A big question is whether this drama could have been avoided. I asked Paul Trillon, senior vice president of China at Albright Stonebridge Group’s strategy firm, whether the US had a good plan for the surprise killing, or if the strategy was wrong to begin with. He said it’s a bit of both.
Trillo said the US government has been keeping Huawei and ZTE equipment for several years – similar to Britain’s approach – and quickly removing some Chinese equipment or devices in sensitive areas such as near military installations. He said the United States must quickly remove the threat of the weapon, but that everything will remain in place.
Trillo and some China policy experts I spoke with worry that the ways in which the U.S. uses Chinese technology are not always effective or focused on the right things.
The US is also concerned about the potential for TikTok or other apps from Chinese companies to leak sensitive information about Americans or spread Chinese government propaganda. Policymakers have yet to figure out how to address those threats, or have made little progress given the relentless cyberattacks on Chinese government agencies and companies.
Officials have not always had a consistent message about building a homegrown computer chip industry to counter China. And if the U.S. wants to make American technology stronger, it could do more to support the immigration of technologists or repeal Chinese tariffs that hurt Americans.
The US could theoretically do it all. Officials can hedge the country against potential foreign threats and devote time, money, and resources to supporting policies that are better for American innovation. Instead, we have a lot of bits and pieces that are yet to be added.
Read past OnTech newsletters on how the US is responding to Chinese technology:
Before we go…
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Taiwan produces the most important electronic devices on earth: My colleagues Paul Mozur and Raymond Zhong explained this week that advanced computer chips were part of the background to Speaker Nancy Pelosi’s controversial visit to Taiwan this week.
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There is no easy blueprint for Internet fame and fortune. How-to courses suggest that people can become famous online by paying freelancers to make YouTube videos with similar ingredients, such as an invisible narrator, a catchy title, or a top 10 list of celebrities. As my colleague Nico Grant reports, this indelible idea can certainly be defeated.
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She keeps grilling online. Drew Afualo has made Tik Tok’s most popular videos by verbally trashing people for their racism, extreme phobias and stereotypes, according to Bloomberg News. (Subscription may be required.)
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