Huawei was never a darling of the Chinese government's industrial policy, and many state-owned companies that, like the Great Dragon and Shenzhen Electronic Group, had not entered Mr. Trump's blacklist. It is Huawei, not the other companies, that pioneered 5-G technology, the next generation of wireless networks that the United States considers a national security risk.
Huawei succeeded despite, not because of, the Chinese government's industrial policy. It is a genuine private company, owned by its employees. In the 1990s, when the authorities strictly regulated and restricted population mobility, Huawei had trouble obtaining a residence permit for employees in Shenzhen.
Going hard on Huawei was the wrong way for the United States to confront China over its complaints – even though many of them are completely valid.
Huawei committed theft of intellectual property, but it also invests heavily in research and development. According to the EU industrial R&D investment scoreboard, in 2019, Huawei is ranked fifth in the world on R&D consumption, ahead of Apple (which is seventh). About 45 per cent of the employees work with R&D. By Chinese standards, the company is collaborative: While it has developed its own operating system, it has also continued to use Google's Android. Delivery contracts with US companies amount to around $ 11 billion a year. Many foreign nationals count as employees, including at senior level. And then – pure irony – it seems that the Chinese who celebrate Huawei are doing so precisely because it stands for values that will also resonate with Americans: a can-do attitude, independent vision and openness to the world.
An early failure to answer the Trump administration concerns ZTE, another Chinese telecom company. In the spring of 2018, the US Department of Commerce banned US companies from selling critical pieces to ZTE. But the Trump administration later reversed that decision – bringing ZTE back from the brink of bankruptcy.
Unlike Huawei, ZTE is a government subsidized by the Chinese government and seems to be gaining little love from the Chinese public. It is also a weaker company than Huawei, and therefore more prone to being derailed. Targeting ZTE first would also have allowed the United States to take bolder measures in the reserve and escalate matters by confronting Huawei later if necessary.