Predictably, given the yo-yo nature of US trade and foreign policy, the Trump administration has stepped back from an outright ban on Huawei buying American components. Trade talks with China have resumed, with Huawei concessions apparently a key demand from Xi Jinping’s government. The first significant result was an agreement that Huawei could buy hi-tech equipment from US suppliers again. But though this is important in the short term, removing a possible roadblock to 5G expansion, in reality very little has changed as the hi-tech industry adjusts to a new global landscape.
But how much difference will all this really make? China has redoubled its determination to achieve self-sufficiency in core chip technologies and 5G patents. Trump may have relented this time, but the temporary block on ZTE last year, which nearly brought that firm to its knees, and the battles with Huawei this year, have demonstrated how China remains far too vulnerable to the whims and changes in US policy, as long as its major vendor rely on US technology and parts. So the swing of global R&D investment and semiconductor prowess will continue towards China, whose government will offer investment and support on a scale that western administrations cannot.
The ‘5G race’ will continue, with tub-thumping on both sides, but last week’s MWC Shanghai trade show highlighted the fact that China really has won this race (see below). We can hope that the trade talks result in a greater spirit of cooperation and mutual respect, of the kind that is essential to ensuring that 5G is a global platform, not a group of technology islands. But with 5G becoming a weapon in a new cold war, there are few grounds for optimism, and the best hope is that, behind the rhetoric, vendors and operators will be allowed to make their pragmatic deals and alliances unfettered by artificial restrictions and excessive tariffs or sanctions.