If you watched the third presidential debate this week, you got the sense that in the U.S.-China relationship, there are only good guys and bad guys, and all the bad guys are in China. The Americans are the valiant defenders of well-paying jobs; the Chinese are the ones who make tires so cheap it hurts the Americans. The Americans have a currency so free it’s the envy of the world; China’s is so manipulated it stunts competition the world over. But the squabbling isn’t limited to what you heard at the debate or just the two governments. It’s also happening between governments and private companies.
For years, Huawei, a Chinese telecom giant, has been trying to break into the U.S. market. Huawei wants to provide communication infrastructure to the U.S., but the U.S. wants to make sure Huawei, founded by former members of the People’s Liberation Army, isn’t actually a spy organization. Huawei claims to be just like any other Silicon Valley tech giant. U.S. intelligence agencies, despite finding no evidence of spying, view Huawei’s technology as too vulnerable to hackers. The House Intelligence Committee classified Huawei as a national security threat. State capitalism and the challenge it poses have expanded enough that the government is officially worried about them.
The U.S. appears to be coordinating with the Canadians to resist Huawei’s advances. Stephen Harper, the Canadian Prime Minister, called his country’s relationship with China “complex” and acknowledged that there’s a national security dimension to its dealings with Huawei. In the midst of investing in cyber security, the Canadian government is also considering whether to allow Huawei to bid on building a new national email system.
The challenge for the U.S. is in developing even broader coordination against Huawei’s advances — and it won’t come easy. Granted, Britain’s Parliament is investigating the relationship between Huawei and British Telecom, but that doesn’t mean the U.K. will adopt the American stance. In response to the U.S. committee’s anti-Huawei announcement, British Prime Minister David Cameron came out and said his government would not change its relationship with the company. Huawei employs 800 people in the U.K. and a recent $2 billion investment will create 700 more jobs in years to come. Europe will be even more difficult to convince — Huawei is already well-established there, with $3.75 billion in sales in 2011; the relationship is just too lucrative for recession-riddled countries to pass on.
This is part of a larger trend, as we’ve seen many American allies actively invite Chinese investment. British foreign policy has focused on getting commercial deals done. Angela Merkel’s dealings have led many to dub the Berlin-Beijing link as “the special relationship.”