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Lessons learned from the US-China trade war

Read time 5min 00sec

There is little doubt the much-publicised move by US president Donald Trump to ban US companies from using ICT from anyone considered a national security threat – seen to be aimed at Chinese tech companies and Huawei in particular – has had a tangible effect on the consumer electronics, telecommunications networks, smart devices and cloud services sectors.

The ban has come against the backdrop of the US-China trade war, in which the US has set or increased tariffs on many categories of goods imported from China. And Beijing has responded with its own retaliatory tariffs on US goods destined for Chinese markets.

The war is evolving into a fight over which of the world’s two largest economies will control the future of technology and telecommunications.

Significantly, Huawei is involved in the deployment of 5G wireless technology, and is a provider of products that enable super-fast 5G networks. Its involvement in the trade war fracas could have crucial implications for 5G development.

5G networks are key to the development of smart cities, driverless cars and breakthroughs in telemedicine and industrial automation.

With 5G networks being approximately 10 to 100 times faster (with reduced latency) than current 3G/4G networks, they are set to enable a range of new-generation applications.

The Internet of things will be one of the main areas to benefit. With the interconnection of “everything”, a host of new options will emerge, allowing people to communicate faster and more effectively.

5G networks are key to the development of smart cities, driverless cars and breakthroughs in telemedicine and industrial automation. 5G technology will also create a raft of new opportunities in education, manufacturing and agriculture.

So important in the SA context, 5G will be a catalyst for job creation and economic growth for many years to come.

One of the key drivers behind the US government’s stance against Chinese tech firms is China’s 2017 National Intelligence Law requiring all Chinese organisations and citizens to “support, assist and cooperate with the state intelligence work”.

Is this as serious as the US, and some of its supporters, make out?

Recent media reports point out that, according to Trump, the restrictions were placed on Huawei because the company is a security threat but, paradoxically, the restrictions could potentially be lifted as part of a deal to end the US-China trade war.

The contrast between the US posture on Huawei and South Africa’s position could not be more pronounced. Sidwell Medupe, a SA Department of Trade and Industry spokesperson, says: “The South African government does not intend to change its behaviour towards the Chinese tech company [Huawei] despite the US ban,” adding that “we do not discriminate against any international companies; we treat foreign companies like local companies”.

This is to be expected as SA accords a high level of support and trust to Chinese companies as it is part of the BRICS (Brazil, Russia, India, China and SA) trading bloc.

There is a lesson to be learned from the fallout from the US-China trade war and the Huawei debacle. It’s that no matter what side of the fence local organisations are on, it’s vital for those who value data integrity and their proprietary information to take great care when purchasing/installing networks from any vendor, not only those in the media spotlight.

The message to these organisations is clear: Do not permit governments to influence or make network and tech purchasing decisions for you. Decisions, which must be made on the basis of individual-needs, carry enormous weight. Swapping vendors down the line isn’t as easy as turning a page, or as simple as flipping a light switch.

For example, in the coming race to 5G networks, choosing the wrong horse to back could prove disastrous. Networks today must be open, virtualised and secure, and able to act as platforms from which innovative, new, content-driven 5G applications are launched.

For many decision-makers this will present a sizable challenge as they evaluate evolving business strategies against the background of rapidly developing technologies and the overarching need for bullet-proof security; the combination of which may demand a cultural revolution within many organisations.

Network managers and infrastructure administrators may well require help to design – and perhaps redesign – their 21st century-proof network architectures. Who to turn to? Should the vendor or reseller that built the current network be called upon again? Or could this supplier be out of step with the relentless progress made by today’s technology?

It’s no secret that the advances taken by the communications industry have the potential for disruption and are as demanding of vendors and resellers as they are of end-users.

In this light, decision-makers will do well to revisit the old model in which dealing with the incumbent supplier was de rigeur. Today’s network architects must be able to demonstrate a high degree of proficiency when it comes to the support of new-age networking environments. In viewing the fast-approaching horizon, the over-riding conclusion must be that it's “a new ball game” when it comes to defining purchasing criteria for the 5G era.

Decision-makers should accept that the information on their network infrastructure is often covered by governance rules and may be of significant value to outside organisations. The risk of purchasing from the cheapest vendor or one without the best current credentials is by no means an acceptable one.

Paul Stuttard

Director, Duxbury Networking.

Paul Stuttard is a director of specialist distributor Duxbury Networking. Currently Cape-based, he has been with the company for 29 years and has extensive experience in the IT industry, particularly within the value-added distribution arena. His focus is on the formulation of future-oriented network optimisation strategies and business development objectives in collaboration with resellers and end-users in Southern Africa.

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