Imagine, if you will (and you should), a big American tech executive being detained over unspecified charges while on a trip to Beijing.
That is exactly what a number of Silicon Valley executives told me they are concerned about after the arrest this week of Meng Wanzhou, the chief financial officer of the Chinese telecom company Huawei, in Canada at the behest of United States officials.
“It’s worrisome, because it’s an escalation we did not need,” one executive said, referring to the already tense trade talks between the two countries. “What China will do, given all the existing tensions, is anyone’s guess.”
[Kara Swisher answered your questions about this column on Twitter.]
No one I spoke to would talk on the record, out of fear of antagonizing either side and also because no one knows exactly what is happening. But many expressed worry about the possibility of tit-for-tat arrests.
While everyone focuses on the drama of the arrest — Ms. Meng was grabbed while changing planes at the airport — and its effect on the trade talks and stock prices, to my mind there is a much more important fight brewing, and it is about tech hegemony. Specifically, who will control the next internet age, and by whose rules will it be run?
Until recently, that answer was clearly the United States, from which the Internet sprang, wiring the world together and, in the process, resulting in the greatest creation of power and wealth in history. While China has always had a strong technology sector, in recent years it has significantly escalated its investment, expertise and innovation, with major support from the government.
That hand-in-glove relationship creates obvious issues, and the Trump administration is right to stop pretending that China does not present a threat both from security and innovation perspectives.
The arrest of Ms. Meng isn’t the first time the United States has cracked down on Chinese companies. This year the No. 2 Chinese telecom maker, ZTE, was slapped with a $1 billion fine for violating trade rules, and the Singapore-based Broadcom was blocked from buying the San Diego-based Qualcomm.
But the high-profile arrest of Ms. Meng underscored a new and disturbing spiraling in the already complex relationship the tech industry has with China and the Trump administration.
The Justice Department had been investigating Huawei on suspicion of having violated sanctions against exporting American technologies to Iran, and the arrest of Ms. Meng appears to be part of that effort. Since Huawei has become a global powerhouse in smartphones and equipment for the mobile networks, it’s no surprise that scrutiny about whose interests it is serving would increase. The company’s founder, and Ms. Meng’s father, Ren Zhengfei, was a former engineer in the People’s Liberation Army, which had long set off warning bells among American intelligence officials about Huawei’s ties with the Chinese government.
All this makes the move against Ms. Meng look like a particularly bold one and a message to China that the United States has come to play.
The government has a lot to be concerned about. As critical 5G — fifth generation — wireless networks roll out over the world, many are being deployed by Huawei. These are the networks that will usher in the next age of innovation, and the idea of China — which pretty much exemplifies the surveillance economy — dominating that age is troubling.
But I am perplexed about why the Trump administration has been such an embarrassment when it comes to the kind of actual leadership and vision needed to keep the United States at the forefront of the tech race.
Our government’s commitment to investment in what’s coming next is the best counterpart to vigilance against competitors like China. Instead, we are seeing a loud but decidedly empty effort to promote the idea that tech manufacturing should return to the United States (it won’t) and a very weak commitment to bringing qualified tech and science minds into the centers of power (a good pick for the head of the Office of Science and Technology Policy has yet to be confirmed after being nominated this year).
This week, the White House released a five-year plan around STEM education — science, technology, engineering and math — that is not nearly robust enough to make the Chinese even slightly nervous that we can keep up with their decidedly more aggressive efforts to train their work force for the next era of computing.
Also this week in the White House, a round-table was held to debate topics like artificial intelligence, 5G wireless and quantum computing, with top tech executive such as Satya Nadella of Microsoft, Sundar Pichai of Google, Safra Catz of Oracle and Steve Mollenkopf of Qualcomm in attendance. It was called a “listening session,” and it was reported that President Trump “popped” in, at a time when these issues need far more sustained attention from the top than that.
Which is why it came as no surprise when The New York Times reported that Mr. Trump was not briefed about the planned arrest of Ms. Meng, even though it took place at the same time he was having dinner with China’s president, Xi Jinping, in an attempt to find a truce in the trade war.
From where I sit, the sentiment in Silicon Valley seems to be: Good for the government for being tough on Chinese companies when they break the rules — that rule-breaking having been a longtime complaint of companies like Cisco and Apple. Vigilance is key, of course, but everyone would feel a lot more confident if the government was also focused on investing more in American innovation and if the crackdown looked less chaotic.
Which is why you can imagine a big American tech executive being detained over unspecified charges while on a trip to Beijing. And our government should, too.