China Doesn't Play Fair, Poses Major Threat to US Leadership on 5G, China Expert Says
China is intent on leading the world on 5G and doesn’t plan to play by the same rules as the U.S., warned Carolyn Bartholomew, vice chairman, U.S.-China Economic and Security Review Commission, on a Hudson Institute panel Tuesday. China is already the world’s largest manufacturer of devices for the IoT and a global in network equipment manufacturing, she said.
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“China is not Japan, it’s not Norway, it’s not Germany, it’s not some of the other countries that are working on some of these technologies,” Bartholomew said. “They are providing, I believe, sort of a fundamental threat to the way we do things, to our values and to the political system, the social and political system that we have.” The Chinese government is determined to lead the world on 5G and may already be getting started on 6G, she said. “It’s employing a full range of industrial policies to obtain that position.”
Chinese leaders have said China followed on 2G and caught up on 3G, Bartholomew said. “In 4G, we ran head to head, and in 5G, we will lead.” Chinese technology leadership is a threat to U.S. competitiveness and U.S. national security, she said. China’s state-directed approach to technology development limits market opportunities for foreign companies in China and gives it advantages over competitors, she said. “China is not a free-market economy and this is not a level playing field,” she said. “The Chinese government is protectionist and we ignore that at our own peril.”
White House staff make clear the administration will focus on beating China, said Thomas Duesterberg, senior fellow at the Hudson Institute. “Read the president’s own statements -- they’re dead serious about doing what they can to promote manufacturing coming back to this country and not to treat it the way it has been treated in the past.”
The U.S. wireless market and light-handed regulation has worked well for 30 years, said Hudson economist Harold Furchtgott-Roth, a former FCC commissioner. “It has rewarded innovation,” he said. “Companies that do well survive and prosper. Companies that are less innovative, less competitive, do not.” Consumers have benefited, he said.
Furchtgott-Roth said questions remain as to whether it matters who leads the world on 5G technology. In the 1980s, “there was a lot of strum und drang” about the migration of TV-set technology to Japan, he said. Thirty years later, “no one really notices” that almost no TV sets are made in the U.S, he said. “But 5G may be different and the reason it may be different is … the potential for a single company to control 5G technology,” namely Huawei in China, he said. “Arguably they are already way ahead of most other chip manufacturers and aggregations in this space.”
Bartholomew told us a Trump administration proposal to build a national 5G network at least raised some interesting questions (see 1801290034). “I don’t think that it was given a fair hearing,” she said. “Whoever put it out put it for the reason that they wanted it shot down.”
Shane Tews, American Enterprise Institute visiting fellow, said the government in 1984 [the year the AT&T breakup was ordered] answered the question of whether competition is better than a national network. “It’s kind of felt like we were heading right back there,” she said of the 5G proposal. “Didn’t we decide that wasn’t the path we wanted to go down?” Tews said the current FCC focus on infrastructure will help keep the U.S. competitive.