Wests perception of China to blame for Huawei & ZTE’s US troubles

TelecomsTech’s Beijing correspondent Dr Lin Sun says the latest move against Chinese telecoms manufacturers isn’t unexpected given the prevailing US mentality towards China and Chinese companies.

It is indeed bad news for Huawei and ZTE, he writes. It doesn’t matter how accurate the allegations are. The conclusion will hurt the two companies in many aspects, and probably even in European markets. It raises more barriers to US entry, especially among the first tier operators that HW and ZTE badly need to do business with.

I’ve noticed the statement by the House lumps different charges together. Huawei’s “former and current employees”, allege that Huawei has engaged in corruption, including bribes. I have to admit this is very common in China and most Asian countries (Singapore is probably an exception), because many people think it is the best way to get things done, but is at odds with Western value systems.

But this has little to do with HW and ZTE’s ties with Chinese military and the potential risk to US national security, which is a far more serious issue. By lumping them together may make the case look convincing but in my opinion it is really a separate issue.

As I said before, the two firms may not have direct or covert links with Chinese government or military to cook some secretive or clandestine agenda. But simply befriending a powerful government that controls virtually every aspect of society is good enough to raise suspicion, especially when there is a lack of understanding and transparency.

The Chinese government wields total control within its domain. The West never fully grasps that this is the reality of doing business in China; the source of misunderstanding and undue accusations. Unfortunately, for this reason, Huawei and ZTE can never make themselves totally clean in the eyes of the West. Go, blame the system.

To make it worse, today Cisco announced it has terminated cross sales agreement with ZTE after ZTE was found selling Cisco sensitive equipment to Iran. The problem in this case, in my opinion, is the serious lack of moral judgment and basic conscience which is like a disease these days in China – money and wealth is almost the only motivation to live and everything else is being trashed.

Huawei and ZTE will have a hard time to enter the US market because they are presumabed to be a risk, whether it is true or in just perception.

Huawei’s rumoured IPO may help a little, but the stigma of these accusations may also damage the firm’s market value. I think a cloud will hang over the two firms for a long time unless something dramatic happens that sets the firms free and allows them to become bona fide world players.

Until that day, they will find themselves in constant battle with the West.

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