China Is Shooting Itself in the Foot Over Huawei
Beijing's hostage diplomacy is confirming the West's suspicions.
The conflict between the United States and China is not just a competition over economic prowess or technological might but also a clash over values—whether government power should be restrained, whether dissent is tolerated, and whether citizens are prepared to give up individual liberty for the pursuit of common good spelled out by those in power. Countries with geopolitical or economic interests tied to both of these great powers find themselves caught between a rock and a hard place.
The latest manifestation of this crossfire is the detention of two Canadian citizens by the Chinese authorities in December, in what is widely presumed to be retaliation for Canada’s arrest of Huawei’s chief financial officer, Meng Wanzhou, in Vancouver early that month. A Chinese court has ordered a retrial of a Canadian citizen earlier sentenced to 15 years for drug smuggling, which could result in a death sentence. Canada perceives China’s actions as a tit-for-tat strategy and a practice of hostage diplomacy.
On the other hand, the arrest of a top executive of a first-rate Chinese technology company and a source of national pride, Huawei, is widely perceived in China as Canada aiding and abetting a politically calculated U.S. strategy of containing its growth as a technology powerhouse. China’s Global Times, a state-controlled paper, first described the action as American “hooliganism.” To the Chinese government, the United States is exercising “long-arm jurisdiction” by unfairly enforcing its domestic laws against foreign businesses and individuals. This perception of U.S. imperialism is amplified by the fact that the United States asked its ally, Canada, to make the arrest instead of doing it itself—and by rash statements from the U.S. president. And in China itself, the arrest of a rich and powerful figure would undoubtedly be political.
China argues that the United States is applying pressure on its Western allies to take its side against China in the technology war. Huawei is a leading provider of 5G technology, the next generation of telecommunications—making Huawei a promising national champion in a major field and one the United States thus has an interest in sabotaging.
The U.S. authorities have accused Meng of financial fraud and Huawei of breaking U.S. trade sanctions against Iran. Canada has an extradition treaty that imposes legal obligations on its handling of Meng. China may contend the discretionary nature of the arrest since Huawei was not the first company to have violated such sanctions. This claim may not be totally unfounded, but the United States, not Canada, drove that decision. Now that Meng is in Canada’s custody, her extradition to the United States is a decision of the Canadian court, not that of the Canadian government. Separation of powers in Canada, unlike in the Chinese Communist system, precludes the government from intervening in judicial decisions.
Those parallel views are reflected in a split Chinese-Canadian community. One segment, particularly first-generation Chinese immigrants, believes that Meng’s arrest is politically motivated and Canada is doing the dirty work of the United States. Another, more mainstream camp views the arrest as justified on legal ground and argues that Canada’s treaty obligations and judicial decisions should be respected.
Yet even if Meng’s arrest was politically motivated, China is being shortsighted. If it wants to push Huawei to be the leading contender of next-generation technology and to convince the world of its so-called peaceful rise, it is not playing its cards right. Until the detentions of Canadians by the Chinese authorities, it was still possible to make the case that technology and politics are not necessarily intertwined. While there are serious worries about data privacy in China, the records of Western firms such as Google and Facebook are looking increasingly stained. Whether Huawei could be trusted less than other companies, simply because it is a Chinese firm, was still disputable. In the meantime, Huawei, with its enormous investment in research and development, has produced superior products with very competitive pricing.
Yet China has lost its moral legitimacy by detaining Canadians at random. Why does moral legitimacy matter, one might ask? Because Huawei needs to convince the world that it is independent of Chinese Community Party politics if it wants other countries, particularly Western societies, to adopt its technology. That’s become harder and harder as Chinese laws have made the role of corporations as possible agents of the state even more explicit—but it was still possible to make the argument, thanks to the long record of independent business deals with the West. Trust is not to be coerced; it has to be cultivated over time, particularly with countries with diverse set of values. Thus, by taking the law into their own hands, the Chinese authorities are hurting—not helping—their homegrown firms. Western intelligence officers who have been making the case against Huawei should feel vindicated by the Chinese government’s actions.
In the corridors of the CIA and FBI, those who see Chinese technologies as fundamentally a threat must be smugly proclaiming, “I told you so!” This makes it much harder the job of those who try to convince their governments of judging Huawei purely on the merits of its technology and competitive pricing. Ironically, a lot of Canadians fall into the latter camp, whether or not the Chinese authorities realize it. Canada stands out as the only member of the “Five Eyes” intelligence alliance, all U.S. allies, not to have disavowed the use of Huawei’s technology.
China may hesitate to put pressure on the United States because it wants the truce over the trade war to last. Instead, hitting a weaker target such as Canada may have been a calculated act. However, if China is trying to convince the world of its peaceful rise or that it is a benign rising power, it needs friends, not enemies.
Under Justin Trudeau’s leadership, Canada has made a huge investment in fostering closer economic and bilateral relations with China, in stark contrast to the policies of his predecessors. Beijing, meanwhile, has just celebrated 40 years of reform and opening up. Over the last four decades, China has made itself an increasingly attractive place for foreign investors, entrepreneurs, skilled workers, students, and tourists. People may not see eye to eye with its political system, but China has offered a safe and welcoming environment for many foreigners. It has also invested enormously in boosting its soft power, including the $1 trillion Belt and Road Initiative to help developing countries build infrastructure and to extend its international influence. All this goodwill is China’s to lose if it continues to engage in hostage diplomacy.