The tech company Huawei has emerged as a symbol of the ongoing economic and political struggle between the United States and China. Initially, America’s political and economic elites were not particularly concerned about China’s rapid growth in GDP and global trade. The United States maintained economic dominance with the dollar being the dominant currency, a large stock market, and leading tech companies such as Alphabet, Apple, Amazon, Meta, and Microsoft. The approach toward China was simple: the Chinese would produce affordable goods, the United States would buy them, and China would finance the deficits this caused.
However, this situation has shifted over the past decade. During Donald Trump’s presidency, a series of tariffs on Chinese imports led to escalating tensions and what was referred to as a “trade war.” The rhetoric shifted under President Joe Biden, who promoted a revival of industrial policy, moving away from relying solely on market mechanisms. Nonetheless, the focus on China remained strong, with Biden enacting even stricter tariffs than his predecessor. Tariffs on Chinese steel, aluminum, solar cells, panels, electric vehicles, and semiconductors were increased significantly.
Green technology played a crucial role in Biden’s trade policy toward China, driven by concerns over China’s near-monopoly in green tech sectors, such as rare-earth elements and the solar-panel supply chain. The U.S. sought to ensure a balanced global transition to green technologies. Under Trump’s second term, the emphasis on green technology diminished, leading to an escalation in trade tensions, with tariffs on Chinese imports reaching new heights.
The rivalry between the U.S. and China has intensified, with the U.S. aiming to secure global economic supremacy, viewing China as the primary adversary. China, in turn, has accused the U.S. of “unilateral bullying.” This rivalry includes fears in the U.S. that it may not win this global battle. Huawei, founded in 1987, has become a focal point in this struggle, viewed as a major threat due to its prominence in telecommunications, despite its early years witnessing little acknowledgment in the U.S.
Huawei’s expansion became more pronounced in the 2000s and 2010s, tolerated as an irritant at worst. However, with the onset of tensions during Trump’s presidency, Huawei was targeted as a symbol of the perceived Chinese threat. U.S. policy has increasingly centered on the security implications of Huawei’s telecom equipment, amid fears of espionage through these networks.
Journalist Eva Dou explores these dynamics in her book, “House of Huawei: The Secret History of China’s Most Powerful Company,” which notes Huawei’s deep integration into global networks, raising concerns among international spy agencies. Despite U.S. pressures and Huawei’s controversial role in surveillance, the company has grown to be commercially successful, underscored by its considerable presence in the global 5G market.
Dou highlights that Huawei’s business model deviates significantly from Western norms, focusing on survival and reinvestment rather than maximizing shareholder value. The company’s origins in Shenzhen, China, a rapidly growing city known for its economic experimentation and ties with the Chinese Communist Party, have contributed to its unique trajectory and success.
The intricacies of Huawei’s relationship with the state, involvement in technological innovation, and competitive approach within state-influenced capitalism mark it as a significant case study in global economic shifts. Huawei’s success also underscores a challenge to traditional Western economic dominance, demonstrating that major commercial success is possible without significant penetration into U.S. markets.
