The Cold War brought out the most bitter of political rivalry between the United States and the Soviet Union, the then two global superpowers. The animosity between the two revolved around competing ideologies of capitalism and communism. In the end, the US triumphed after Soviet Union disintegrated and communism came unstuck.

Now there is another rivalry that is shaping up to be potentially as bitter, this time pitting the US against China. The latest supremacy battle is not driven by contested political ideologies but technology. At the heart of the tech supremacy war are commercial and national security interests that come with cutting-edge innovations.

Russian President Vladimir Putin has already weighed in on the tech race, noting that this is “the first technological war of the coming digital era.”

Just like it happened in the ideological Cold War, the US and China are seeking to outdo each other as they woo the global community into their fold. Given the extensive reach of US and China technologies, the battle looks set to be all-encompassing, sucking in a good number of countries.

The two countries have for decades held each other in suspicious mode in economic and political terms, and it was only a matter of time before technology became the subject of conflict between the world’s top economic giants.

And it is easy to see why technology is at the centre of Washington-Beijing turf war. A country that takes the lead in technology is bound to call the shots in every sphere of the society, particularly in the realm of security and commerce. US has expressed security concerns regarding Huawei devices and equipment.

However, tech and economic analysts see beyond security into the evolving 5G technology that looks set revolutionise commerce and virtually every sphere of life. China, spearheaded by Huawei, has made great strides in 5G, triggering apprehension in the US taking into account the massive potential of this innovation to reshape the world in mindboggling ways.

The message the US is drumming into the ears of its global allies is that Huawei could use those technologies to spy on citizens. The US has already banned Huawei from doing any work with the federal government. However, the elephant in the room is the financial motivation and technological superiority.

US and Chinese firms are jostling to take the mantle of leadership in the realm of 5G technology, which offers lightning-fast internet that will allow billions more smart devices — from cellphones to self-driving cars to even robots — to operate more efficiently.

As a way of bolstering its position, the US has ratcheted up the rivalry by not only blacklisting Huawei but also bringing pressure to bear on various countries, particularly Germany and UK, to cut ties with the tech firm. Washington is also working to impose tight restrictions on American companies, to force them to limit deployment of Chinese technology.

The UK is, however, rather a test-case of why it won’t be easy shaking off Huawei. While initially UK had pledged to stick to Huawei, this has changed and it is now seeking to shut the Chinese firm out of its borders.
Vigorously deflecting criticisms and accusations of espionage, Huawei holds out its operations in the UK, noting that for the 20 years it has been operating in the country, its track record speaks for itself.

“The UK Government decided in January to approve our part in the 5G rollout, because Britain needs the best possible technologies, more choice, innovation and more suppliers, all of which means more secure and more resilient networks,” Victor Zhang, Huawei UK chief was quoted saying.

However, supplanting Huawei in the UK tech scene, or indeed that of any other country where its systems are deployed, will not come easy or cheap.

Prominent UK networks Such as EE, Vodafone, and Three have all deployed Huawei 5G equipment and it is projected that ripping them and replacing it with new vendors would cost in the region of $2.6 billion (£2 billion). The reason the cost will be this astronomical is that Huawei’s infrastructure is comparatively far cheaper.

Yet costs for network operators are not the only source of concern for operators. Consumers are also expected to pay the price as some of these costs will be offloaded to them. More fundamentally, experts say the UK will lag behind in the rollout of 5G as it will take time to replace Huawei.

“The UK government expects the delay to (5G) rollout will be three years, but that is probably an underestimate,” says Peter Williamson, honorary professor of international management at Cambridge Judge Business School, noting that the delay could be as long as five years.

In the US-China tech war, the UK, perhaps more than any other country, has found itself in the horns of dilemma. It desired to maintain an edge in adoption of 5G technology, while keeping its relations with US in a cordial footing. However, there was no way it could juggle the two balls successfully in the air together.

One had to drop, and it is its 5G ambition that has suffered as its wireless operators are required to shun Huawei equipment as dictated by Washington.

As they seek to find Huawei alternatives, countries in the US bandwagon have to contend with delays in adoption of Internet of Things (IoT) that is key to critical innovations including driverless cars and robotics. IoT rides on 5G, which possesses humungous capacity to crunch enormous amounts of data.

Finding alternative 5G providers is not a simple task for the UK and any country that is in the same side with the US in its tech battle with China. Some of the tech companies that are considered potential Huawei replacement are Ericsson, Nokia, Cisco, and Samsung. While these firms have the wherewithal to act as an alternative to the Chinese giant, the challenge, as stated above, will be on costs, where they are unlikely to match Huawei.

Huawei troubles are likely to immensely benefit these tech firms, but only if they rise to the occasion. These companies however have a new competitor in the offing.

As part of efforts to limit the impact of Huawei fallout, the United States and a number of countries are now seeking to come up with an open wireless network architecture dubbed Open RAN.

The objective is to harmonise equipment by different vendors so that mobile operators are not forced to stick to one supplier. Open RAN or O-RAN technology, experts aver, will enable service providers to accelerate 5G network rollout through its open architecture.

The system is also touted to give small vendors an opportunity to provider their own services and allow operators to tailor-make the network as required. One of the major pluses for this project is to foster competition and consequently pushing down costs.

US tech giants such as Microsoft, Cisco, Intel, Qualcomm, Oracle, and Nvidia are banking on the RAN to stake a more sizeable claim to telecom equipment business. The question again is whether these firms will cash in on this opportunity and show that they can measure up to the onerous task of replacing Huawei.

The success of Open RAN will mean more lost business for Huawei which has hitherto been the biggest maker of telecoms networking equipment. Last year, its sales hit $42 billion, while telecom-related sales outside of China were estimated to be in the region of $20 billion. However, this preeminent position is certain to come under increasing pressure going forward as US and European countries shun its equipment.

“Five Eyes” countries have banned or are mulling banning the Chinese vendor. Five Eyes group refers to a communications surveillance alliance between Britain, the United States, Canada, Australia and New Zealand, which was established after World War II.

Germany has not entirely banned Huawei, but it has imposed tough restrictions which the Chinese firm will find difficult to comply with. However, these restrictions present a number of challenges to the country’s telecoms sector.

Deutsche Telekom, which is 31.9 percent owned by the German government, is said to be heavily reliant on Huawei in its mission to upgrade its network from 4G to 5G. Other German network operators too are using Huawei infrastructure and it would not be easy severing links with the firm.

As these are happening, China seems to be also charting a new path away from US technologies. It has for a while planning to be a global force in a wide array of inventions such as robotics, artificial intelligence (AI), autonomous vehicles, communications equipment.

This has rattled the US, which has accused China of using unorthodox means in a bid to achieve technology supremacy. US firms operating in China have been loudly expressing concern about theft of intellectual property and forced technology transfers.

Huawei’s new P40 device also seeks to create alternative to Google’s software and services, which it plans to take beyond its borders.

As the war shapes up, who is having an upper hand?
The US seems to be still holding most of the cards. However, it will be hard-pressed to maintain the competitive edge given China’s aggressive goal to come on top sooner rather than later.

Granted, the top technology companies are still concentrated in Washington, dominating fields such as e-commerce, software, smartphones, search engines and social media sites. But while the US is ahead in terms of the value of tech companies, China is beginning to show it is capable too of developing its own firm of global stature in term of financial muscle. Alibaba and Tencent come to mind.

China counts on its huge population to build strong companies and propel it to the top as global tech hub. With its 1.4 billion people, any Chinese innovation that resonates with consumers is bound to grow exponentially and be a major force not only in Beijing but across the globe.

Take for example mobile technology. China has four times as many mobile users as the US. This means that in any mobile-based technology, such as digital business and payments, China possesses immense potential to stay ahead of the curve.

One of the reasons Huawei has borne the brunt of President Donald Trump wrath is its lead in communication equipment. The tech giant is the leader in the manufacturing of fifth generation technology that will define the next phase of innovations. The US has certainly not been amused as its turf is breached by a country that is seeking to take the mantle of economic power and technological advancement.

But even after ceding ground 5G, the US still calls the shots in AI. According to a 2017 survey, the US boasted of 28,000 AI experts while China had 18,000. However, this situation looks set to change in the near future as more Chinese students pursue science, technology, engineering and math (Stem) courses.

Another bone of contention is the field of semiconductors where the US maintains an edge over China. Washington is keen to shut the door on Beijing as far as chip technology is concerned. China lags behind in chip making, and the US is focused on maintaining the lead by denying Chinese firms technologies and components that may make them competitive in this realm.

The above scenarios point to an epic battle that tech enthusiasts will certainly be keenly watching.
The U.S. was long the biggest and most important internet market in the world.

Reporting by Daphne Oloo, Justin Brown and Rose Marshall



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