US government should consider China’s approach to national tech champions, says Senator Mark Warner
- Ranking Democrat Mark Warner suggests ‘dramatic, different approach’ to domestic industrial policy to counter China
- The US might need to work with ‘Five-Eyes’ allies to build a tech champion able to compete with Huawei
The US government may need to adopt Beijing’s policy of supporting corporate champions, and work with allies, in order to create alternatives to Chinese 5G wireless technology, a ranking senator said on Monday.
Senator Mark Warner, a Democrat representing Virginia and vice-chairman of the Senate Select Committee on Intelligence, said that the US should consider taking a “dramatic, different approach”, including an interventionist industrial policy, to create American companies able to compete with Huawei Technologies, the Chinese telecom equipment producer portrayed by the Trump administration as a national security threat.
“We in this country have avoided the notion of industrial policy where the government tries to pick winners and losers. But when we compete with a nation with the size and scope and the focus of China, [current policies] may need to be rethought,” Warner said at the Washington-based United States Institute of Peace, a bipartisan, government-funded think tank.
Warner is also a member of the Senate Finance Committee and a ranking member of the Senate’s National Security and International Trade and Finance Subcommittee.
Huawei’s competitors – Finland’s Nokia, Sweden’s Ericsson and South Korea’s Samsung, in particular – are all great companies, but none of them can count on the kind of financing that China’s government provides the Shenzhen-based firm, according to Warner.
“Should we with our ‘five-eye’ partners … think about how we can combine to have not necessarily an American company but a Western open-democracy type of equivalent that is able to have quality equipment as well as the financing ability to compete?” said Warner, referring to the intelligence-sharing alliance comprising Australia, Britain, Canada, New Zealand and the United States.
The US Commerce Department this year put Huawei on a trade blacklist, citing national security concerns, and the Trump administration has pressured US allies to exclude Huawei from their telecommunication networks in light of China’s rapid rise in the next-generation 5G wireless technology.
Huawei gets a 90-day extension to buy from US companies
The US government said Huawei’s equipment could be used for espionage activity by China’s intelligence agencies, an allegation Huawei has repeatedly denied.
Despite the security concerns, many countries including the Philippines, Germany and Britain, have resisted pressure from Washington, with some questioning the validity of the US warnings and arguing that Huawei’s products are cheaper than those of its competitors.
With data transfer speeds up to 100 times faster than those currently available, 5G technology promises to revolutionise everything from the “internet of things” to autonomous driving, smart cities and virtual reality, with billions of dollars of economic benefit set to accrue to countries able to keep up with it.
US President Donald Trump said in April that the race to 5G is “a race America must win”.
However, the country has no vendor that can provide end-to-end telecom infrastructure solutions, something Huawei brings to the table, and a strength the US side criticises as a result of Beijing’s support.
Federal Communications Commissioner Jessica Rosenworcel said at Politico’s AI Summit earlier this month that Switzerland is leading the world in the commercial deployment of 5G while China is leading the world in 5G facilities and towers.
The US “has got work to do”, said Rosenworcel. “We created the 4G application economy in the United States, and the rest of the world took notes.”
