US abandons free trade with Huawei

On May 9, Ren Zhengfei, the founder and CEO of Chinese telecom giant Huawei who has always kept a low profile, was interviewed for the first time in 26 years while in New Zealand, claiming that Huawei has become a globalized company. This shouldn't be seen as a China-focused company seeking international expansion. A globalized Huawei means the competence center of the company will be resource and capacity-oriented. This competence center will manage Huawei's global businesses, including businesses in China.

Chinese people can understand Huawei's positioning and support it. Huawei's businesses can be found all over the world and has been locked in intense competition in different countries. When competitions involve local companies, governments may show a bias. However, most of them will exercise restraint in doing so because such actions violate the rules of free trade.

The US is the largest economy in the world. It was the strongest promoter of the principle of free trade last century. However, the US has caused the most trouble in preventing Huawei from entering its domestic market.

It's not because Huawei's products are not advanced enough, but because the US government eliminates the possibility of competition between Huawei and its US peers using the excuse that Huawei may threaten US information security. Chinese companies have just about heard every excuse when being kicked out of a market for security reasons.

US society is still very worried about its information security but countries which have accepted Huawei attach the same importance to theirs. This may make us doubt the US sincerity in blocking Huawei. Many people doubt that it was because Cisco, Huawei's major US competitor, is afraid of losing this competition and uses the US government as a shield.

As a powerful country, the US should not be afraid of Huawei for any reason. Huawei is just a communications equipment manufacturer. The US has the strongest capability in the world to deal with two things at the same time: maintaining its national information security and opening its market to Huawei. US companies also should be emboldened at the idea of competing with Huawei.

US confidence is vacillating and its sense of insecurity is emerging. The development of Huawei in the global market will eventually challenge US companies. Blocking Huawei out of US market can only delay this at best.

As long as Huawei can maintain its advantage on research and development capabilities and pricing, it still has a bright future even if it cannot enter the US market. After all, the global market is much bigger than the US market. When Huawei becomes powerful enough, the US will suffer more than Huawei from its rejection. What US protectionism protects is inertia and backward-thinking.

The whole world watches the US' unfair treatment of Huawei, which gives China the moral right to retaliate against US companies in Chinese market.

The roles of China and the US in the free market are about to be reversed, and Huawei may be an iconic turning point in this process.