George Gilder: The Huawei Test

“Don’t solve problems.”

So advised the late patriarch of management theory Peter Drucker.

What could Drucker have meant? Problem-solving is the chief preoccupation and agenda of nearly all business managers and their companies.

But when you “solve problems,” as Huawei’s leaders know, you tend to feed your failures, starve your strengths, and sink into costly mediocrity. Problems orient you toward the past. Entrepreneurship is about the future.

“Don’t solve problems,” said Drucker. “Instead, pursue opportunities.” When you pursue opportunities, as Huawei’s amazing history demonstrates, you can transform your entire competitive environment. You can turn your previous “problems” into the maps and matrices of a new business strategy. You can launch a juggernaut of innovation and growth.

Exemplifying this transformative wisdom are Huawei leaders Ren Zhengfei, founder-philosopher, and his extraordinary daughter Sabrina Meng, Huawei chief financial officer and guiding light of a new book published by the company, which launches with her preface. Grasping its visionary principles of finance, you can gain new Druckerian insight into the miracle of Huawei. You may even understand how Ren Zhengfei in just three decades could turn the equivalent of $3,000 into not just China’s telecom-equipment champion but a multinational colossus. It now commands $105 billion of revenues, operations in 70 countries, and 170,000 employees from around the world, 40,000 of them non-Chinese. Its finance division, ruled by Meng, commands hundreds of execs from such schools as Harvard, Cambridge, Wharton, and Yale.

In the United States, anxious experts and rivals have offered many explanations and alibis for the Huawei miracle. They depict Ren as an ex-army officer with sinister ties to the Chinese government. They imply he created his company as an elaborately mounted Trojan horse for communist hackers and spies. As the story goes, huge subsidies and gigantic heists of intellectual property account for Huawei’s meteoric ascent as a state-owned and state-ruled enterprise.

Ren’s army career, however, was routine for Chinese youths of his era and devoted to engineering. As the son of a “capitalist roader” pilloried during the “cultural revolution,” Ren Zhengfei launched one of the first fully private firms in mainland China. Long before the creation of any Chinese stock exchange, he founded Huawei with a major financial innovation, what is called in the U.S. an ESOP (employee stock-ownership plan). Far from leaning on the government, Huawei triumphed by outperforming all the state-owned enterprises previously dominating China’s telecom industry. Huawei’s accountants at KPMG, report no major state subsidies and verify Huawei’s private ownership structure with 98.6 percent of the equity owned by employees and 1.4 percent retained by Zhengfei.

Ren built Huawei in admiration for American openness, now ironically in danger of being lost in a siege of xenophobic fear of Huawei. Meng’s finance book quotes his 2014 riff on American success:

Openness is one of the factors that contribute to the success of capitalism. There was no economic success in China when it shut its doors to the outside world. Therefore, we must open up.

Currently, many people in China hope to grow stronger behind closed doors. This is a mistake. Throughout history, China has shut itself away from the outside world for long periods of time, making it impossible to become strong. The US is the world’s most open nation, and thus the world’s strongest. Though the US may fall behind from time to time, it has seen constant waves of innovation: Apple, Facebook, and others. As long as the US remains open, who can stop it from moving forward? (Ren Zhengfei, Absorbing the Energy of the Universe Over a Cup of Coffee, 2014)

Ren Zhengfei is also a supply-sider: “Reducing taxes encourages investment. It is like digging a trench in the ground, which makes it easy for water to flow.… Benefits from increased investment can offset loss of revenue from tax cuts for the government.”

All disruptive entrants into markets that were pioneered abroad — from Ford and Edison to Carnegie and Morgan in the U.S. — incur charges of theft for emulating established incumbents. All major business competitors, necessarily imitating one another and using common components under industry standards, provoke tensions over intellectual property. In Huawei’s case, the charges of theft mostly reflect rivals’ shock at Huawei’s success in bursting into a market shaped by standards and inventions from the United States, made by such companies as Cisco, Bell Labs, Qualcomm, and 3Com. In its imitative thrust, Huawei certainly was aggressive, like “fierce wolves,” as its own leaders have acknowledged, and it has paid fines and suffered penalties.

One would never know it reading American journals, but more than 15 years ago the claims of stolen IP were fully ventilated and litigated. It was an episode that rivals should study today before they disparage Huawei’s current constitutional challenge to the U.S. ban of Huawei equipment in U.S. networks.

In January 2003, the American router pioneer Cisco shocked Huawei with a wide-ranging suit for property rights infringement. To prevent any effective response, Cisco unleashed its 70 pages of complaints in a famously patent-friendly venue in a remote district court in Marshall, Texas. A Cisco executive in Asia was reported to have declared: “This time we need to make Huawei go bankrupt.”

To most company leaders, this move would have seemed an insuperable “problem,” solvable only by capitulation and retreat to niche markets in China. But in his characteristic inspirational leadership, Ren saw the Cisco suit not as a problem but as a giant opportunity. Declaring that he trusted the fairness of the U.S. court system, he went to Texas to defend his company against all charges. Huawei proved that many of the alleged cases of theft involved functions such as string comparison routines from “C” language software libraries readily available on the net from third parties. In the end the court vindicated Ren’s confidence by upholding much of the Huawei defense and barring Cisco from raising the issues again in another venue.

Huawei is now a leading player and stakeholder in the global system of intellectual property rights and standards organizations. In recent years, Huawei has paid Qualcomm of San Diego more than a billion dollars in royalties. Last year Huawei bought $11 billion worth of microchips from U.S. companies such as Intel and Broadcom. U.S. optical and other component suppliers such as NeoPhotonics enjoyed some $4 billion of additional Huawei business.

Today with some 2,300 patents in the relevant technology, Huawei is no longer a disruptive follower. It is the world leader in patents for the new industry standard called 5G and offers the only turnkey system. The rest of the world is trying to catch up. The new standard spearheaded by Huawei, the Fifth Generation of wireless architecture, enables a wide range of future industries, from next-generation airport surveillance and security to urban traffic management to self-driving automobiles and battlefield robotics, from internet virtual reality and the Internet of Things to smart cities and intelligent grids. Huawei now has a deep interest in the maintenance of intellectual property rights.

So let’s sum it up.

The U.S. has chosen to attack arguably the most creative and powerful and best-led capitalist company in China. The leading supplier of telecom equipment in the world, it is led by Ren, a charismatic philosopher-king of global industry with a natural eloquence and insight.

The U.S. government regards Huawei as such an immediate threat that it has reached into Canada to put CFO Sabrina Meng, the founder’s elegant daughter, under house arrest in Vancouver. It is no way to treat a lady, regardless of whether one of Huawei’s former subsidiaries blurred the murky rules of the international boycott of Iran with the errant sale of a few personal computers and software and supposedly deceptive relations with banks.

In spite of major royalty payments to U.S. companies, it is being indicted for stealing U.S. intellectual property. It is said to be concealing surveillance devices in its smartphones, worldwide bestsellers behind only Samsung’s. It is said to be hiding chips in its routers and switches that enable them to be controlled from China, jeopardizing our networks and power grids.

Now the U.S. is backpedaling the claims, making the more general argument that as a Chinese company Huawei is necessarily under the control of the Chinese government. Chinese law imposes a requirement that businesses comply with the needs of national intelligence bodies.

A flagrant example of “problem” paralysis, this U.S. claim is even more dangerous than the specific smears of Huawei. Such a rule would apply to any nation, including the U.S. with its aggressive National Security Agency, and would render impossible most international trade in technology. It would cripple the international fabric of supply chains and standards that underlies most world economic growth and opportunity.

In a letter to his employees in the midst of the crisis over the arrest of his daughter, Zhengfei outlined how to turn this “problem” into an opportunity. He wrote: “We must be open, transparent, active and courageous to reveal problems and actively promote improvements. Software development is a creative and artistic work that takes full advantage of our ingenuity and potential. We need to improve and enhance the transparent, traceable and auditable full process management mechanism.” Ren concluded: “We must enhance software engineering capabilities and practices from initial design and complete build to product lifecycle management from a credible perspective.”

Telecom companies and other network managers should take Ren at his word. They should do their jobs and negotiate open and defensible contracts for sensitive equipment. If the pattern of software upgrades are seen as a threat of subversion, the upgrades should be managed by U.S. telcos. If they harbor suspicions, Huawei’s customers should demand access to software source codes, making its software essentially open source, even while protecting intellectual property. Firmware programming for network hardware systems should be cryptographically signed, just as no iPhone or Huawei app will boot unless it is cryptographically signed.

Nearly all Huawei’s American critics implicitly deny that it is possible to accommodate Chinese capitalism without supporting Chinese communism. However, Chinese communist businesses — that is, the SOEs, state-owned enterprises — have steadily shrunk as a portion of the Chinese economy as China has three private firms have boomed. Today Chinese government spending as a share of GDP has dropped to around 17 percent compared to our close to 40 percent. China has three times as many IPOs and more venture capital and more technology by far than we do. We’d better start copying them soon to retrieve our once entrepreneurial and tech-oriented economy.

Our manufacturing failures are an effect not of Chinese machinations but of our green climate-change bureaucracies, monetary prodigality, and anti-meritocratic diversity campaigns. I lost $500,000 on a carbon nanotube filtration company not because of Chinese theft but because of an outrageous EPA decision that carbon nanotubes resemble asbestos and cause cancer. Asbestos claims, nearly all false by the way, led to litigation that destroyed much of our chemical industry (some 36 companies). Chemophobic California regulators have driven almost all U.S. custom wafer fab from Silicon Valley to Taiwan and Israel. It is now illegal in the U.S. to hire the best computer scientists and engineers. Even the Trump administration is outrageously suing Google for sex discrimination. College science and engineering is being massively debauched by climate-change and diversity agitprop, while the Chinese massively study real science and engineering. Rare earths? That takes digging and chemicals. Forget it.

So we can’t do nanotech and can’t mine rare earths and can’t do chemicals and can’t hire the best computer scientists, and we take orders of magnitude more time to build a factory, a road, or a city, and we want to blame China for our economic doldrums? China saved our economy by low-margin, high-skilled manufacturing that gave us the world’s four most valuable companies which took almost all the profits. Who is exploiting whom?

I hate communism as much as anyone and have devoted most of my career to fighting it. But I scarcely met a real communist during a month in China, speaking at many of their major universities. I found their government bureaucrats far more sophisticated and flexible than ours. None of them mentioned climate change as any kind of threat. Most Chinese kids study engineering and science and completely see through communist lies and flaws. In the U.S., I’m mostly banned from major universities by crypto-communist faculty and students studying diversity and genderitis, and all sicklied o’er by a pale cast of green goo. U.S. crypto-communists are ubiquitous in our schools and far more deadly to the U.S. than Chinese communists. Huawei capitalist engineers making routers and switches and chips for us are incomparably more valuable to the U.S. than most U.S. students complaining about their privileges.

I hate to say it, but without the help of Chinese capitalism we’re pretty much over as a global power and economy. With China, we have a chance. But we can’t trade and cooperate with them if we interpret everything they do as theft and rapine and concentration camps and Orwellian surveillance. Why am I supposed to care if computers in China survey the streets and airports for terrorists and criminals? We’ll be importing their equipment to replace the feckless TSA unionists at airports as soon as there is another jihadist attack in the U.S. They don’t have them in China anymore.

The root of our Huawei fears and fantasies is a profound breakdown of security on the internet, which sows paranoia everywhere. The more the industry invests in firewalls and intrusion-detection schemes and hacker SWAT teams, the more hacks occur, with 2018 registering an all-time record of a billion breaches. With the internet a porous pyramid where all the money and data and power rise to the top, no one trusts anyone. With money a manipulable tool of central banks, with $5.1 trillion a day of currency trading — some 25 times global GDP — the world sinks into a primitive mercantilism.

Security is not a video game or a police challenge. It is an architecture. The remedies for the breakdown of internet security and the scandal of manipulable money — the spread of fear and the collapse of trade — are the same: the development of a new computer architecture and a new monetary system based on blockchain cryptography. This solution is on its way. Until it comes, both the U.S. and Chinese governments should end their paranoid maneuvers.

If the U.S can’t deal with Huawei without craven bars and bans, it might as well retreat to a fetal curl, sealing off its “infant industries” and illusions in a commercial theme park bristling with tariffs and quotas and xenophobic regulations. But let’s take inspiration from Peter Drucker. Huawei is not a problem for American technology; it is a huge customer and huge opportunity. It offers a chance to revitalize the U.S. economy and internet security and infrastructure with a new competitive challenge and resource of innovation.

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George Gilder

George Gilder is a Senior Resident Fellow at the American Institute for Economic Research. Mr. Gilder is one of the leading economic and technological thinkers of the past forty years and is the author of nineteen books, including The Scandal of Money and Life After Google. Mr. Gilder is a founding fellow of the Discovery Institute, where he began his study of information theory.

First published at AIER. org

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51 Responses to George Gilder: The Huawei Test

  1. tgs

    So the ASD recommended to the Australian government that Huawei equipment not form part of our 5G infrastructure to benefit Trumpian mercantilism and the stock prices of Silicon Valley giants?

    This article brushes away the significant security concerns around Huawei with nonsensical platitudes and fantasising about the ever present panacea that is blockchain (up next, blockchain solves peace in the Middle East).

    I agree with the argument that the ban on Huawei would be repulsive if motivated purely by mercantilist concerns. However, this article does quite literally nothing to prove this extraordinary assertion.

  2. stackja

    Central Committee approves?

  3. Mark from Melbourne

    Puff.

    This stood out (just) :

    But we can’t trade and cooperate with them if we interpret everything they do as theft and rapine and concentration camps and Orwellian surveillance.

    Delightful phrasing, that “if”. The fact is that – leaving aside the concentration camps, which are surely not Huawei per se – there is not a scintilla of an “if” about the rest in any serious student of the recent history of technology.

    Perfectly reasonable business plan. Also perfectly reasonable to understand that’s what it is and to take action.

  4. Ƶĩppʯ (ȊꞪꞨV)

    WHy solve problems when you can just steal the solution from you competitors. brilliant!

    lock up the chicom princess!

  5. Ƶĩppʯ (ȊꞪꞨV)

    and the article conveniently neglects to mention hardware backdoors which are nearly impossible to test for.

    that small omission is rather telling…

  6. Diogenes

    tgs
    Huwai has opened up its source code to the British GCHQ no-problemo
    https://www.theregister.co.uk/2015/03/30/huawei_kit_kosher_says_spook_laden_ukgov_board/

    There are security issues that GCHQ found which Huwei is addressing,
    https://www.theregister.co.uk/2019/02/22/huawei_gchq_security_plan/

    Because of limits to numbers of links , for shits and giggles put the following ‘cisco backdoors’ in your favourite search engine

    As for that supposedly ‘super dooper secret’ embedded chip, that story came from a non technical publication, and in this case it is a case of ‘pictures or it didn’t happen!’ Not one image has been produced to back up this claim, and their have been no leaks with any real confirmation in any of the reputable technical press . If you go back to the original article note the weasel words – possible, technically feasible etc from real named experts.

    As for ASDs findings … cuio bono? -Who benefit? Consider 5G will become a major threat to the NBN monopoly. The smaller players like Vodaphone & TPG built all their 5G plans around Huwei 5G gear, and both have stated they cannot affford to proceed if they can’t use that gear. So we have a cosy duopoly of Telstra & Optus (Singtel) and there will be coverage gaps, and very little competition/

  7. Seriously, who can one trust in today’s world? As the saying goes. ‘Let he who is without sin cast the first stone.’

    BTW, the Chinese make better movies than Hollywood. Have they stolen that as well?

  8. Diogenes

    Zippy,
    its hard to steal everything when you are the PIONEER in a technology. Huwei own many patents and developed a lot of teh technology In its first kneejerk IEEE banned Huwei staff from anything to do with it (situation since clarified) …

    Ironically, the immediate effect is likely to slow western understanding of 5G technologies, given Huawei’s grudgingly admitted lead over western companies in the field, as academics told us.

    https://www.theregister.co.uk/2019/05/29/ieee_huawei_controversy/

  9. MPH

    It is no way to treat a lady

    I stopped reading there. Honestly what an absolute blue pill loser, he has no idea what is at stake.

    If you want to inflict pain on your enemy you don’t injure a peasant, you injure a prince. All those 5G benefits are of no benefit to the vast majority of the population therefore make perfect collateral damage in a clash of civilizations.

    Fisky remains completely correct about libertarians…

  10. John A

    Peter Drucker, Bob Townsend (Up The Organisation) and Tom Peters (In Search of Excellence and following) would simply say “Oh, no, not again!”

    Ren is correct – the Industrial Revolution and the advance of the scientific method in the 18th, 19th and early 20th centuries were marked by remarkable openness and collaboration. For example, British railway engineers would regularly publish their locomotive designs in engineering journals once they were on the rails and in service. It did not stop their respective companies from competing fiercely for freight and passenger traffic.

    Since the rise of the concept of “intellectual property” as a defensible asset, such openness has been reversed by proprietary interests, an increase in secrecy and a concomitant rise in “industrial espionage.”

    First, it was the Japanese who listened to the early 1920s efficiency gurus like Taylor (time and motion studies) and Gilbreth (Cheaper by the Dozen but not the film). Then it was the “Five Asian Tigers” of Taiwan, Hong Kong, South Korea, Singapore/Malaysia and Thailand who applied the lessons of Peter Drucker. Now it’s the Chinese.

    Each time, the results have appeared remarkable but have been gained by hard work over a long period of time (usually) and diligent, thorough application.

    And each time, our whingeing western business “leaders” whined about the theft of jobs, skills and “intellectual property.” Pah! Get a life!

  11. This is why the existence of so many entities is based purely on IP ownership, they don’t actually produce anything. And the US patent office has a lot to answer for.

    For those who aren’t aware, a cinema camera company called RED, owned by a chap named Jim Jannard (founder of Oakley – sunglasses), somehow got a patent for the idea of compressing a RAW video file in-camera (Cinema DNG in this case). Compressing video files or still camera images in-camera is nothing new, but the US patent office just issued the patent like they always seem to do when it comes to US companies (without any due diligence).

    That patent meant that an Australian cinema camera manufacturer, Blackmagic Design, had to remove the Cinema DNG format from their cameras, or pay an exorbitant licensing fee. So Blackmagic produced their own RAW file format and went about their business. The intent of the RED IP dispute was to try and kill off or significantly hobble Blackmagic, who has made huge inroads into the cinema industry with all manner of cinema gear, including editing software that’s become an industry standard.

  12. Zatara

    What an amazing level of self-delusion.

    – China is a communist country.
    – There is no such thing as a privately owned company in China, impervious to manipulation by the Central Committee and responsive only to market forces, no matter what facade they chose to show the world.
    – Huawei is not a private company and is an arm of the Central Committee of the Chinese govt.
    – The Chinese communists have ruthlessly spied on the rest of the world in order to gain advantage over them since their inception. Their doctrine demands it.

    Now, tell us again about innocent Huawei and the evil West.

  13. Infidel Tiger

    What the fuck is this embarrassing horseshit?

    Shameful that it appears on this blog.

  14. Infidel Tiger

    I hate to say it, but without the help of Chinese capitalism we’re pretty much over as a global power and economy. With China, we have a chance. But we can’t trade and cooperate with them if we interpret everything they do as theft and rapine and concentration camps and Orwellian surveillance. Why am I supposed to care if computers in China survey the streets and airports for terrorists and criminals? We’ll be importing their equipment to replace the feckless TSA unionists at airports as soon as there is another jihadist attack in the U.S. They don’t have them in China anymore.

    OMFG.

    Sinclair how did you let this swill get published here?

  15. Nato

    I like this article even more after reading the comments. I’m not convinced, but what evidence contradicts it?
    TAFKAS did a Huawei piece a while ago too, sliming Aussie bureaucrats IIRC.
    Diversity of thought is one of this site’s strengths.

    I’m still hung up on the first time I saw a too-good-to-be-true (low cost, high specs) phone on display and read Who Are We? I’ll never own one Lol

    Good point what does it matter if China does spy on us. They’re spyingg anyway, just like the Americans and the poms and the Aussies.
    The lizard people overlords are getting it all feed back to their alien biocomputing mega centre in Tajikistan and monitoring your Mylanta usage, too.

  16. Percy Popinjay

    In the meantime we’ve been blessed with Kevni “rodent pleasurer” Ruff and the Nuclear Milkman, founder-philosophers of the National Brontosaurus Network.

  17. alan moran

    Whatever debate there might be about Huawei as a communist spy network, surely everyone on this site must affiliate with Gilder’s comments
    “Chemophobic California regulators have driven almost all U.S. custom wafer fab from Silicon Valley to Taiwan and Israel. It is now illegal in the U.S. to hire the best computer scientists and engineers. Even the Trump administration is outrageously suing Google for sex discrimination. College science and engineering is being massively debauched by climate-change and diversity agitprop, while the Chinese massively study real science and engineering. Rare earths? That takes digging and chemicals. Forget it.

    “So we can’t do nanotech and can’t mine rare earths and can’t do chemicals and can’t hire the best computer scientists, and we take orders of magnitude more time to build a factory, a road, or a city, and we want to blame China for our economic doldrums?”

    Here and elsewhere in the West, universities have become utterly politicised in both their teaching and research and are dancing to a jig, the focus of which is prevention of enterprise and replacing a search for hidden wealth with one that seeks to impede its discovery

  18. tgs

    As for ASDs findings … cuio bono? -Who benefit? Consider 5G will become a major threat to the NBN monopoly.

    So it’s all a grand conspiracy to prop up the NBN..?

    Ok, bud.

  19. Empire 5:5

    G is for George, Gilder and gullible.

    This post won’t age well. As the extent of chicom spying is laid bare over the next few years, the PRC apologists will have to eat copious crow.

  20. Ƶĩppʯ (ȊꞪꞨV)

    Zippy,
    its hard to steal everything when you are the PIONEER in a technology. Huwei own many patents and developed a lot of teh technology In its first kneejerk IEEE banned Huwei staff from anything to do with it (situation since clarified) …

    please spare us the chicom sob story, this chicom hustler is built on theft of vast fields of IP to even be able to begin to operate. if they have patents they should be dishonoured the same way chicom courts treat westerners.

    ffs the chinese couldn’t even make a pen nib till a couple of years ago as they weren’t able to steal the details from anyone.

    the supply chain must be migrated away from these two bit hustlers as lying and stealing are a national sport.

    if a country ever desperately needed regime change it is china.

    IF the chinese weren’t so fucking lame they would have shaken off the chicoms by now

  21. Empire 5:5

    “So we can’t do nanotech and can’t mine rare earths and can’t do chemicals and can’t hire the best computer scientists, and we take orders of magnitude more time to build a factory, a road, or a city, and we want to blame China for our economic doldrums?”

    Alan – agreed this is a policy problem. The demise of western economic vitality is not the fault of the PRC, but PRC espionage is. Let’s not conflate the two.

  22. Empire 5:5

    IF the chinese weren’t so fucking lame they would have shaken off the chicoms by now

    Easy to say. We’re talking about a culture that has only known despotism.

  23. Chris M

    They’ve already been busted multiple time by multiple countries supplying hardware with unmentioned but intentional backdoor access.

    If that doesn’t bother you then fine, buy their stuff. But don’t expect it to be used by governments or in any security critical application.

  24. Tel

    Consider 5G will become a major threat to the NBN monopoly.

    With the emphasis on “will” it’s an absolute certainty.

    At any rate the actual development of 5G is happening in USA and Europe, not in China. There will be plenty of vendors happy to sell the equipment.

  25. jupes

    Of course we should let the Chicoms build our IT systems.

    What could possibly go wrong?

  26. jupes

    I hate communism as much as anyone and have devoted most of my career to fighting it. But I scarcely met a real communist during a month in China, speaking at many of their major universities.

    Well they’re hardly going to admit it while they’re busy selling you their dodgy IT equipment are they you gullible twit.

    I found their government bureaucrats far more sophisticated and flexible than ours. None of them mentioned climate change as any kind of threat.

    Of course not. They see it as an opportunity to make money and bankrupt moronic western nations. They may be evil, but they’re not stupid.

  27. John Constantine

    https://www.bloomberg.com/news/features/2018-07-13/did-china-hack-rio-tinto-to-gain-a-billion-dollar-advantage

    In 2010, four employees of the mining giant were jailed and accused of stealing commercial secrets. Today, the company is more reliant on China than ever.

    They asked not to be identified because of the matter’s sensitivity. Many said the experience had been unforgettable, even traumatic. One former executive called it the most nightmarish period of his career. Taken together, their accounts portray one of the first and most devastating instances of China’s now-famous hackers spying on a Western corporation, and a cautionary tale about the country’s ability to influence global trade.

  28. Tel

    There is no such thing as a privately owned company in China, impervious to manipulation by the Central Committee and responsive only to market forces, no matter what facade they chose to show the world.

    Unlike google and Facebook for example … not the least bit political.

  29. Rohan

    This article is bullshit.

    I caught up at a reunion with a guy I graduated with a fortnight ago who’s a Chem Eng and a genius with code. He noticed something odd with the network automation of the plant he’d helped install for a client and traced it back to a password encrypted file in the OS of a Huwei VPN gateway. He cracked the password and yes, they had unfettered access to everything on their network. He pulled the gateway, notified his client and the authorities.

  30. John Constantine

    The specter of Hu lingered, though. In the summer of 2012, MI5 Director-General Jonathan Evans gave a rare public lecture in London’s financial district to warn about the “astonishing” level of state-sponsored online spying. One attack, he said, had cost a British company an estimated £800 million ($1.3 billion) in lost revenue, “not just through intellectual property loss but also from commercial disadvantage in contractual negotiations.”

    https://www.bloomberg.com/news/features/2018-07-13/did-china-hack-rio-tinto-to-gain-a-billion-dollar-advantage

  31. John Constantine

    Stern Hu shows us that the State doesn’t have to own a share in a business to control it utterly when it needs to.

    https://www.smh.com.au/business/the-economy/stern-hu-case-a-wake-up-call-on-the-challenges-of-china-relationship-20180706-p4zpx3.html

  32. Tel

    Walmart have openly refused to use Amazon’s cloud computing services, and they are leaning on all their suppliers to do the same.

    https://www.retaildive.com/news/report-walmart-asking-suppliers-to-quit-amazon-cloud/445509/

    It’s almost like there’s a bit of distrust out there and people are worried about conflicts of interest.

  33. Zatara

    Unlike google and Facebook for example … not the least bit political.

    Not political. Ideological.

  34. Fess

    Why wouldn’t the author have a quiet chat with a cyber security expert before writing this gosh. Clueless, but opinionated.

  35. Fess

    Tosh- keeps autocorrecting.

  36. Fess

    What do we want? No more auto-correct errors! When do we want it? Cow!

  37. I know in no uncertain terms Huawei are a security risk and the Chinese government are actively involved, I personally know of their infiltration in certain networks. The rest is just politics.

  38. Davey Boy

    and while we’re opening our admiring arms to Huawei, George, to prove how not-xenophobic we are, let’s offshore the storage of all our our tax, medical, research etc data to servers somewhere nice, entrepreneurial, transparent and trustworthy like mainland PRC, hey? It will be cheap as chips, and fits in nicely with the open borders concept, right?

  39. Sunni Bakchat

    It seems like few of the commenters here have read any of Gilder’s work. Much of which is quite brilliant and generally consistent with the libertarian world view.

    Gilder is at least advancing an alternate perspective. How many of those making negative comments about his perspective as those same people complaining about the lack of free speech.

    The comments posted by Gilder were originally posted as editorial in the WSJ last month. The comments section in the WSJ put Cats to shame by comparison.

    Gilder could be accused of naivete but to accuse him of worse is a far greater ignorance.

  40. Notafan

    I never understand why people think that criticizing someone’s point of view is a denial of free speech.

    It is the sorts of stupid argument you expect to hear from someone like Yassmin Big Mouth

    And no one cares about the alleged brilliance of Washington Post commenters..

  41. Sunni Bakchat

    Notafan, It is one thing to criticise, another entirely to seek to deny an alternate perspective. A person who didn’t understand the difference might be quite stupid.
    Whilst we’re on the subject of stupidity, you might care to know “WSJ” stands for Wall Street Journal.

  42. Iampeter

    So the ASD recommended to the Australian government that Huawei equipment not form part of our 5G infrastructure to benefit Trumpian mercantilism and the stock prices of Silicon Valley giants?

    Yep.
    Basically one of the major priorities of the Trump administration is implementing protectionist policies to help well connected cronies. That’s the whole point of the “trade war.”

    This article brushes away the significant security concerns around Huawei with nonsensical platitudes and fantasising about the ever present panacea that is blockchain (up next, blockchain solves peace in the Middle East).

    Yea this article has a lot of Libertarian anti-foreign policy clap trap, but the reality is that any real security concerns cannot be fixed by righs violating regulations anyway. It’s just like Middle East terrorism can’t be fixed by regulating immigration.
    Those advocating for this stuff are just good leftists that don’t want to let a crisis go to waste and politically illiterate conservatives, that clutch to one or two issues because they have no political ideology and have no idea what’s going on or what to do.

  43. Percy Popinjay

    I found their government bureaucrats far more sophisticated and flexible than ours.

    I’ve observed creatures that spend their entire lives existing under rocks that are “far more sophisticated and flexible” than our beloved bureaucrats.

  44. Buccaneer

    Jack Ma has a wonderful and inspiring rags to riches story that when you dig a bit deeper might not be all that it seems. https://www.abc.net.au/news/2018-11-27/alibaba-founder-revealed-as-communist-party-member/10559988
    It’s much easier to create a touchy feely story to placate western sensibilities than to change your fundamental culture and play fair with others.

  45. JB of Sydney/Shanghai

    China
    Huawei signs deal to develop 5G in Russia, on sidelines of meeting between Xi Jinping and Vladimir Putin
    Agreement was signed on sidelines of meeting between Xi Jinping and Vladimir Putin in Moscow
    Huawei will work with Russian telecoms company MTS to develop network over the next year
    Agence France-Presse
    Agence France-Presse

    Published: 1:49am, 6 Jun, 2019

  46. Richard

    Why worry about Huawei? Google recently sent me a map marked with every location I had visited during the month of May. By “location” I mean store by store. Who is spying on whom?

  47. Os

    I understand that the guy who invented autocorrect has just died. May he roast in piss.

  48. L.B.Loveday

    OS,

    Surely autocorrect is something you choose to turn on or off? I have never had anything autocorrected by any software I’ve used.

  49. Mitchell Porter

    Os
    #3035803, posted on June 6, 2019 at 11:18 am
    I understand that the guy who invented autocorrect has just died

    Did you mean to type, the guy who invented autocorrect has just… been hired to develop drones for a delivery service? Because that is the latest career move of Ken Kocienda, who wrote an article for Wired actually called “I Invented Autocorrect”.

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