Five eyes versus the rest

Khalid Hussain
Huawei’s acknowledged superiority in 5G has been proven by the senseless manner of black balling Chinese competition by the Five Eyes and their allies including Japan. Since the bulk of 5G hardware is dependent on semiconductor production located in the United States, and source code has roots in the history of Five Eyes itself, it is fair to observe China has beaten them at their own game!
JPMorgan Chase Bank has agreed to pay penalties of more than $5.26 million to settle over 87 violations of US sanctions, including measures imposed against Cuba and Iran, the US Treasury said last Friday. This is not the first time either. Yet Jamie Dimon, chief executive officer of JPMorgan Chase & Co. was never arrested.
Then the fact remains that JPMorgan Chase was hardly alone in violating US sanctions. Since 2010, the following major financial institutions paid fines for violating US sanctions: Banco do Brasil, Bank of America, Bank of Guam, Bank of Moscow, Bank of Tokyo-Mitsubishi, Barclays, BNP Paribas, Clearstream Banking, Commerzbank, Compass, Crédit Agricole, Deutsche Bank, HSBC, ING, Intesa Sanpaolo, JP Morgan Chase, National Bank of Abu Dhabi, National Bank of Pakistan, PayPal, RBS (ABN Amro), Société Générale, Toronto-Dominion Bank, Trans-Pacific National Bank (now known as Beacon Business Bank), Standard Chartered, and Wells Fargo.
None of the CEOs or CFOs of these sanction-busting banks was arrested and taken into custody for these violations. In all of these The US has rarely arrested senior businesspeople, US or foreign, for alleged crimes committed by their companies. Corporate managers usually not arrested for alleged company malfeasance. That is why China considers Americans have done this to a leading Chinese business woman to provoke the Chinese government, business community, and public.
Economists see the Trump economy slowing drastically next year before a possible recession in 2020 as benefits of growth popped in 2018 boosted by tax cuts that are expected to fade in 2019. The US economy will get back to its longer term growth rate of around 2 percent. Factors behind the slower growth include fading impact of Trumps large tax cuts, trade and tariffs wars with China and the Federal Reserve’s compulsion to raise the interest rate. JP Morgan sees economy growing at less than 2 percent in 2019. Diminished financial market liquidity since the 2008 implosion is a “wildcard” that is going to be too tough to game out for Trump’s America.
This means the unprecedented arrest of Huawe’s CFO Ms Meng has been even a desperate move to give American economy some relief by black balling the Chinese technology giant leading the 5G race around the world. Her arrest was very provocative because it is based on extra-territorial sanctions by the US. The US claim that it can order other countries to stop trading with third parties such as Cuba or Iran is ludicrous and patently illegal. I bet Trump would certainly not tolerate China or any other country telling American companies with whom they can or cannot do business. Sanctions such as the US sanctions on Huawei cannot be legitimately enforced by one country alone for it must follow agreements reached within the United Nations Security Council. It actually violates the Security Council Resolution 2231 that calls on all countries to drop sanctions on Iran as part of the 2015 Iran nuclear agreement. Yet the US rejects the Security Council’s role in such matters. The Trump administration thus poses a serious threat to international rule of law and global peace.
Arbitrary moves by Five Eyes—America, Canada, Australia, New Zealand and the United Kingdom sharing intelligence—are geared to hobble China in the race to 5G supremacy. All bans or limits on the use of Huawei-supplied equipment in Tier-1 telecom operators’ networks that have been announced or expected to be announced, only come from key allies of the US. American and European technology vendors have steadily lost ground to low-cost Chinese suppliers and a tipping point in Chinese supremacy has been almost reached during the development of 4G mobile broadband standards. With 5G on the horizon, the race to dominate global communications has become a commercial and political compulsion for China as well as the Five Eyes.
The US government is keen to exploit any and all weaknesses in Huawei’s armour and is alleging Chinese tech has the potential to be cyber-weaponised as leverage, influencing the buying decisions of its partners around the world. It is pertinent to note no firm evidence has ever published any confirmation that equipment from any Chinese vendor contains suspect hardware or software. The fact remains there is no evidence in the public domain despite more than a decade of accusations by US tech companies losing market share to Chinese players.
The US ban coincides with the rise to power of Donald Trump who is keenly aware of the need to curb the growing power of Chinese trade. It is more than coincidental the Trump has appropriated these unproven concerns as facts needed to force a ban. The US does have tremendous global influence. And the present administration is known to have been pressuring key allies to ban or limit the use of Chinese technology, ideally giving US vendors an opportunity to win 4G/5G and other important data networking contracts they might otherwise have lost.
The arrest in Canada to extradite Ms. Meng Wanzhou to the US suggests a ramping-up of American strategy to hobble Huawei. Although no details of the charges have been disclosed, yet America insists Huawei—under Ms Wanzhou’s directions—either sold or attempted to sell equipment to Iran in contravention of international sanctions on technology trading.
Earlier in 2018, fellow Chinese tech player ZTE was found to have flouted those actions and was subjected to a large fine and obliged to make transparent its decision making processes. It was also subjected to a brief international ban that could have forced the company into bankruptcy. The US government is looking for similar failings at Huawei.
It is too early to guess what’s Next. The fifth generation wireless technology (5G) is a sensitive issue. The technology is poised to underpin a wealth of connected services, such as integrated public and private transport systems, healthcare, financial services, power and water utilities and so on in ways that earlier 3G and 4G systems could not. Most of the world’s 5G networks are likely to be built over the next four to five years. The US government is obviously trying to keep Huawei at bay for long enough for the US or Western companies to win the 5G race.
It is transparent that the US action against Huawei’s CFO Meng is really part of the Trump administration’s broader attempt to undermine China’s economy by imposing tariffs, closing Western markets to Chinese high-technology exports, and blocking Chinese purchases of US and European technology companies. This is evidently a part of the economic war on China. It is so reckless as if it bears Trump’s own signatures.
Looking into the eyes of the Dragon is the new game in town for neocons. However, the US trying to hold back China is more hopless than the Dutch boy try to keep back the North Sea with his thumb in the dyke hole. And the American’s have a president who is so bereft of common sense he went on record telling Reuters yesterday that he would intervene if needed in [the] Justice Department case against Chinese telecom executive accused of violating Iran sanctions. “Whatever’s good for this country, I would do,” he told the news agency. “If I think it’s good for what will be certainly the largest trade deal ever made—which is a very important thing—what’s good for national security—I would certainly intervene if I thought it was necessary”, he told the Reuters news agency.
This is admitting political interference and casts doubt at the whole edifice of law and justice in the Western hemisphere. Trumps’s comment is starkly at odds with earlier remarks from US officials. It came shortly after Ms Meng was granted bail awaiting a hearing on extradition to the United States. He has just confirmed China’s suspicion this was not a legal proceeding but a political negotiation, potentially changing the terms of the conflict. Trump’s statement has made a mockery of the principle of rule of law. Any intervention by Trump or linkage with other issues can only complicate the Sino-US bilateral relations for the worse and would undermine the resolution of their ongoing trade war.
It is obviously an embarrassment for Canadian Prime Minister Justin Trudeau and Chrystia Freeland, Canada’s foreign minister, who have been insisting Ms. Meng’s arrest was a legal, not a political, move. “What is important for us to communicate to China and to Canadians is that the detention of Ms. Meng is not a political judgment by Canada,” Freeland said at an event in Toronto on Tuesday. “This is about Canada abiding by an extradition treaty with no political interference at all. We believe very strongly in following our treaty commitments and in not interfering politically.”
Trump is also not helping UK Prime Minister Theresa May who is fighting for her political survival as Brexit is in chaos and Tory MPs have triggered a vote of no confidence to replace her. Sir Graham Brady, the chair of the 1922 Committee, has received at least 48 letters from Conservative MPs calling for a vote of no confidence in May. Under party rules, a contest is triggered if 15% of Conservative MPs write to the chair of the committee of Tory backbenchers.
Prime Minister May has cancelled her planned visit to Dublin to discuss the Brexit negotiations with the Taoiseach Leo Varadkar, the prime minister, chief executive and head of government of Ireland. On Monday, she cancelled a vote on her plan to get assurances on the Irish backstop. Theresa May has vowed to fight a vote of no confidence triggered by disgruntled Tory MPs with “everything I have got” as she warned ousting her could risk Brexit being stopped. ”
Britain is now in its deepest political crisis since World War II. May’s deal is all but dead. There is no viable way for it to pass through parliament. With just four months to go till “Brexit day” on March 19, 2019. This leaves the UK only weeks before initiating emergency measures in preparation for a “no deal” Brexit. What happens next is anyone’s guess for it could run the mean a general election, a new referendum or a new Tory leader and fresh negotiations are all very serious possibilities.
How did it come to this? The British establishment has always been deeply divided on the EU. Only a part of the UK elite came to terms with the “loss” of empire and saw Britain’s future as being part of Europe. But others have been unable to accept a reduction in British power. To them, Europe is an affront, a protectionist, bureaucratic nightmare, and they are desperate to reclaim their birth right—in alliance with the United States—to rule the world once more using Britain’s financial muscle.
That’s why May’s withdrawal deal laying out the terms of Brexit, and the “political declaration” setting out objectives for a future relationship with the EU, has left all in the dark about the post-Brexit relationship of the UK with the EU. England is attempting to have full sovereignty over trade, regulations and money, and yet stay close to the EU that Brexit only remains on paper and the country effectively stay s inside the customs union. This doesn’t please those who wanted to remain in the EU or the Brexiteers.
Brexit is going to be a radical transformation of the UK economy in which governments constrain the power of corporations and finance, rewrite the rules of global trade, remove the power of the market altogether over big swaths of society. Political chaos is frightening for the EU but for the UK it is a really big chance for the English Establishment to undermine the EU.
Whether or not May survives the no confidence vote, the British Establishment will for sure. One proof is to ask where is Labour in all this Brexit mess? We ask this as the Labour Party is nowhere to be seen in The Conservative government teeters on the brink of collapse riven with divisions and apparently incapable of negotiating its way out of a damp paper bag.
That is why Germany, France and others in the EU has not heeded the American advice to shun Huawei. Deutsche Telekom and Volkswagen have already hinged their wagon to the Chinese 5G technological support for the new era. EU, is thus, set to explore new business models for mobile networks and network evolution to an All Cloud 5G era.
As Huawei explains on its website, previous generations of mobile networks enabled voice, data, video, and other life-changing services. In comparison, 5G will change our society by opening up the telecom ecosystem to vertical industries. It will help vertical industries to achieve the “Internet of Everything” vision of ubiquitously connected, highly reliable, ultra-low latency services for massive number of devices. Service-guaranteed network slicing is at the heart of 5G and is one of the essential features to achieve this vision. Key players from operators, vendors, and vertical industries have come together to establish a common understanding on service-guaranteed network slicing in terms of the vision, end-to end solutions, key enabling technologies, and the impacts for vertical industries.
Upgrading to 5G will require telecoms firms around the world to spend plenty of money on new hardware and software. Huawei—along with rivals such as Ericsson, a Swedish firm, and Nokia, a Finnish one and of course CISCO from the United States—are going to be among the principal suppliers. America has long alleged Huawei co-operates with China’s government. Media has quoted Western spooks in recent years alleging Huawei might be siphoning valuable data back to Beijing, or that it comes with “back doors” that would allow state-sponsored hackers to eavesdrop on, or even disrupt, communications. Edward Snowden immediately comes to mind for these are all the allegations that he has levelled against the National Security Agency of the United States and the Government Communications Headquarters, the two leading spy agencies among the Five Eyes. Australia, Newzealand and Canada are the other three and are known colluders in electronic eavesdropping all over the world.
Huawei has always denied improper links with the Chinese state and no one has ever found any evidence otherwise. Yet the Five Eyes have the temerity to go on blaming the company and by extension, the Chinese state. Given that America’s government is not above implanting bugs into kit made by its own technology firms, it only makes one laugh when they say someone else is doing that too.
A 5G communications backbone is the foundation to the “internet of things” to usher in the “fourth Industrial Revolution” in which artificial intelligence (AI) will mark the biggest change in business with data and autonomous decision-making that will define it. The more connected the world becomes, the greater the loss to the Five Eyes in letting a Chinese firm provide the infrastructure upon which it all depends. May be they are also worried Huawei won’t let them build any back doors and they cannot continue their spying any more!
Vodafone, meanwhile, the world’s second largest carrier trusts Huawei. “They are a very innovative company. They are very open. We never found anything less than normal in the Huawei equipment and software,” Vittorio Colao said last week. “It’s not like the Cisco router is very different. It’s made in China.” Irish Telecom operators have defended their use of equipment made by the Chinese manufacturer Huawei.
The systematic changes driven by 5G will take a long time to materialise. 5G is the super highway on which Artifical Intelligence will travel. Huawei is a better choice for poor countries for many reasons. Price is no small a consideration and Huawei is obviously more competitive than its Western rivals. Of course, the hyper connected future is not as imminent but the Five Eyes seem unable to wait further in checking Chinese progress.
The hardware and software that make 5G high data transfer rates possible will are now set to be deployed in various markets around the world later this year. China is moving ahead confidently for widespread 5G coverage. This will allow it to accelerate the development of specific 5G-reliant technologies like self-driving cars. Huawei has the hardware, software and experienced human resources to displace Silicon Valley as the world’s innovation centre. Huawei has unveiled several 5G-ready products last week at the Mobile World Congress 2018, including the first 5G customer premises equipment pictured above that supports speeds of up to 2.3Gbps.
China is moving rapidly to develop 5G services nationwide after allocating radio frequency spectrum for the next-generation mobile system to the country’s three telecommunications carriers. Huawei is seen as a national champion and a source of national pride.
The central government awarded China Mobile, China Unicom and China Telecom with 5G spectrum licences on Friday, enabling them to conduct final trials for the new mobile system before its wide commercial roll-out from 2020. “This sends a clear signal to the industry that we aim to promote the maturity and development of China’s 5G industry,” the Ministry of Industry and Information Technology (MIIT) said in a statement posted on its website on Monday. The MIIT said the trials would ensure the compatibility of the various types of radio frequency spectrum ahead of the launch of 5G mobile services.
The world is now clearly divided into three distinct power blocks. The fact that the first block is composed of the Five Eyes actually says a lot about the erosion in the power of the United States of America. Brexit is the Five Eyes Establishment trying to undermine the European Union which is the other block vying for pre-eminence in our world. China and Russia form the third block. India and Japan have put their eggs in the Five Eye’s basket. Pakistan is squarely in the Chinese club. This gives us a de facto membership in the emerging Eurasia block.
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Khalid Hussain is Resident Editor of TLTP – You may contact Khalid Hussain at Resident.Editor@lawtoday.com.pk.pk