The global landscape of technology and telecommunication is experiencing a significant shift as the U.S. imposes stringent restrictions on China’s tech giants, particularly Huawei and ZTE, labeling them as threats to national security. The prohibitions are set to impact the 5G rollout globally, with countries like India feeling the reverberations. Similarly, the United Kingdom has also reneged its prior decision to permit Huawei’s participation in its 5G network deployment.
Historical U.S.-China Tech Relations
Throughout history, China has consistently maintained a guarded approach towards American big-data corporations like Google and Facebook, restricting their operation within its borders. However, this has not hindered the technological transactions between the two nations. As recently as 2019, Apple recorded daily sales worth USD 100 million in China while Huawei Technologies reported record revenues, largely influenced by its presence in Western markets, including the U.S. The new restrictions imposed by the U.S. on Huawei denote the first concrete prohibition action by Western governments in nearly two decades, citing that China’s equipment is intentionally designed for espionage.
The Ban’s Impact on Chip Making Tools
The newly imposed sanctions could potentially lead to significant supply shortages for Huawei, especially concerning specialized chips, which heavily rely on the U.S. This technological cold war threatens to extend beyond the U.S and China, forcing other nations, including India, to choose sides. Numerous countries are wary of similar threats posed by China, while others dread the potential trade sanctions from the U.S. These developments could significantly influence the race to dominate next-generation technologies such as 5G networks and artificial intelligence, creating ripple effects on countries transitioning to a 5G regime, including India.
India’s Stance amid the Tech Discord
Back in 2009, India’s Department of Telecommunications (DoT) urged local mobile companies to halt agreements with Chinese equipment manufacturers following hacking and spying fears. Notwithstanding, India failed to implement any robust measures in line with the DoT’s recommendations. Interestingly, China has significantly contributed towards India’s telecom growth story in both hardware and software fields. However, following the recent Ladakh standoff, India has adopted a more stringent stance. It has requested state-owned telecom service providers exclude Chinese companies from their network upgrade contracts. Justifying the ban on 59 mobile apps with Chinese links as a national security measure, India has signaled its intent to curb Chinese investments and tech companies within its territories.
Global Telecom Landscape Post-China’s Blockage
The increasing trend of governments blocking Chinese participation in 5G networks provides other global players an advantageous platform. The restricting measures could propel European players like Ericsson and Nokia, along with South Korea’s Samsung, into the lead. Meanwhile, India’s Reliance Jio has independently designed and developed a comprehensive 5G solution from scratch. This shift is expected to impact the global 5G rollout, particularly in countries outside North America and Europe.
