China: National Security Threat or Trade Protectionism?

Last week on 8 October 2012, the U.S. House Intelligence Committee released an investigative report accusing two major Chinese telecommunications companies, Huawei and ZTE of posing threat to U.S national security. The committee was concerned that the companies’ networking equipment could potentially help the Chinese military or other Chinese government intelligence agencies collect sensitive data from computer systems and mobile networks. Both companies also have a history of selling surveillance devices to repressive regimes such as Iran and Libya.

To counter the attack, several media outlets in China have run a number of news commentaries in the past few days that the dispute would end up in a “protectionism” trade war and “could be disastrous for enterprises in both countries”. the opinion of Nei Guangnan, a professor from the China Academy of Sciences, that China should protect its “information sovereignty [zh]” had been widely quoted.

The nationalistic position has won many echoes in Chinese social media, some even criticize the Chinese government for being too soft in protecting domestic businesses [zh]:


Wang Feng 213: The U.S government uses national security as a pretext to block Huawei and ZTE from entering their market, why doesn't Chinese government use the same excuse? Make it fair.


Leo Zheng: Not only Huawei, other Chinese businesses in the U.S are facing discrimination. The U.S government has banned quite a number of exchanges in different industries. China also have its own trade barriers, but as Chinese we have to be critical of the U.S government's double standard and protectionism rather than making harsh comments against our own successful businesses. I can't understand this. Just want to remind some people of their stand.


Fang Xingdong: 10 years ago, Huawei was half the size of Cisco in terms of employee numbers, while income was one tenth of Cisco's. Today, Huawei's employees are double the size of Cisco, the number of people in Huawei's research team is more than the total number of employees in Cisco. Since 2006, Huawei has obtained more patents than Cisco. Huawei and ZTE reflect the strength of Chinese high-tech industry. Cisco fails to compete with them, gives up its entrepreneurial spirit and politicizes the market competition.


Blovesky: The Chinese government should reflect upon the U.S investigation of Huawei. It is not enough for the Foreign Affair Ministry to say: The U.S government should give up its prejudice and promote economic exchange. If Huawei poses a national security threat to the U.S, Cisco does the same thing to China? Chinese corporates are growing bigger and stronger, if the Chinese government does nothing to ensure their status, it would hamper the country's economic growth.

Some netizens, however, believe that the Chinese government is responsible for the trade war. Below are some comments picked up from the Southern Metropolis’ discussion thread [zh] at Sina Weibo:



东张西望_轻度:靠政府的中国垄断国企没前途, 靠政客的美国企业一样没有前途!

人来看猫:这种企业要没有间谍嫌疑鬼才相信。 说 QQ 没有替官方监控你觉得可能么?


Bayarea BDTB: The whole world is the same. Google was forced to leave China before. It is also a kind of protectionism. Everyone is the same, with the same reason: national security.

Future flower will open: The CEO of Huawei Sun Yafang started working in National Security Bureau soon after she graduated. Have some more knowledge about the Chinese characteristics, what kind of company is Huawei?

Looking east and west: Chinese corporate that monopolizes the market through government is useless. U.S corporate that depends on politicians is also hopeless.

See the cat: Who will believe these kinds of corporates do not have spies? Do you think it is possible that QQ is not spying on you for the government?

Green Plume: Why does a private corporate have a Party committee in it? The U.S would not find any pretext without such a set up.

Some point out that the problem may lie in the mainland Chinese business model, which tries to strengthen its link with the government in exchange for policy favor.


Flower fragrant: Apart from the fact that Cisco is lobbying behind the scene, we have to reflect upon Chinese business culture. “Making profit in silence”, “creating back channel”, “capitalizing relations”, all these business practices have to be adjusted when entering the western business world. We should give more thought to areas such as brand building, intellectual property rights, research and development, political lobbying, regional law, international capital flow etc.


I am serious, don't laugh: The setting up of a Party Branch in a corporate is a gesture of love to the party. To show that you are loyal to the party. To taint the business with red color so that the party will trust you. I wonder if Huawei is sharing the same thought. Corporates belong to the society, society belongs to the Party. The U.S House representatives are using the same logic. The idea that all land in the kingdom belongs to the King has been upheld by the Party.

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