What is the cost of an idea? Can an idea, a concept, really belong to a single person or entity? These questions have plagued companies and made patent lawyers rich since the word “patent” was first uttered. Apple is seemingly at war with all other disruptive technology firms (Amazon, Samsung, Google, etc.), Groupon is noticing the proliferation of copycat firms (LivingSocial, anyone?) while Facebook struggles to maintain its lead on the digital socializing amid the Twitters, Tumblrs and Pinterests.
This past week, Huawei and ZTE Corp. have been accused of using spy activity. Huawei, China’s largest manufacturer of electronics, has long been trying to break into the American market—first with the attempted acquisition of Sprint Nextel and computer equipment maker 3Com earlier this year. Although they have had business ties in the US through Bain Capital Partners, it seems that the mood has largely soured against the electronics giant. The claim is that, due to growing US concern about the powers of networking apparatus (routers and switches, developed and manufactured by Huawei) could be tweaked to be used as surveillance to eavesdrop on sensitive data or gather intelligence.
Although the US government is claiming that this is a natural precaution in response to mounting suspicion that Huawei was being utilized by the Chinese government for malicious purposes. The Chinese government, however, is crying foul because they see it as an unprovoked attack on their company, citing that this is really more of a protectionist measure for US electronics than it is for national security. But what does this mean to us? The US and China are squabbling over intelligence, market share and “national security”. This is nothing new to the landscape, particularly taking into account the tension that has sprouted between the two superpowers in the past 10 years as China has debuted as a serious force to be reckoned with.
But is this indicative of a greater shift in the US-China schism? Sure, we were a bit step-sibling-ish toward each other before—wary of each other’s intentions, never fully understanding each other’s motives or backgrounds, but the 21st century was supposed to put that behind us. Or was it? As China begins to encroach on the US’ prized technology industry, will we begin to see more of these types of governmental actions? In all honesty, it is too soon to tell the true motives behind the spy accusation, though it is probably safe to say that it is probably influenced by both protectionist measures and suspicion of covert activity.
These types of actions though will change the fundamental way that Chinese companies do business with the US however. Now that it has been publicly announced that the US is not only monitoring the activities of Chinese companies but also suspicious of security threats, it is going to be very difficult for a Chinese firm to not feel scrutinized by the US. The US, on the other hand, runs the risk of losing “favored buyer” status and potentially could fall behind on the technological advances (particularly in hardware), which could lead to a slower pace of progress overall. Whatever the case may be, the “Huawei fiasco” is indicative of a shift in the agenda. Although this could boil down to be something as simple as basic politicking during an election year, it certainly will have much longer lasting ramifications.
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