Huawei ban and Korea

Strategies needed to protect local firms from US-China row

The anti-Huawei campaign by the U.S. has started to affect related local industries.

U.S. President Donald Trump declared war on the Chinese telecom giant by issuing an executive order last week giving authority to the federal government to restrict U.S. companies from using foreign telecommunications equipment that poses an "unacceptable risk to the security of the U.S."

While Trump did not specifically mention Huawei in the executive order, it is seen as targeting the Chinese firm, which was added to the Bureau of Industry and Security (BIS) Entity List, a trade blacklist by the U.S. Department of Commerce, earlier this month. U.S. Commerce Secretary Wilbur Ross said the decision was to "prevent American technology from being used by foreign-owned entities in ways that potentially undermine U.S national security or foreign policy interests." The U.S. has claimed there are security risks particularly in the Chinese smartphone maker's 5G network equipment.

Some U.S. allies have joined the Huawei ban, with countries such as Japan and Britain moving to comply with the restrictions initiated by the U.S. Latest news reports show some Japanese and British mobile operators are delaying the release of new Huawei smartphones amid the U.S. crackdown on the Chinese tech company. Huawei has said the security risk claims by the U.S. are unfounded.

It is feared the U.S. policy to block the Chinese telecommunications company may also start to affect local industries. News reports suggest U.S. officials have been urging the Korean government to join the Huawei ban, and even mentioned the name of a major local telecom company that uses Huawei equipment while pressing Korea on the need to eventually drive the Chinese company out of the Korean market, citing security concerns.

If it is true that the government has been pressured to participate in the Huawei ban, then this puts Korea in a very complex situation. Even though the U.S. is Korea's most important ally, China is the nation's biggest export market.

This is not the first time for Korea to be stuck between the U.S. and China. The situation is reminiscent of the row over the deployment of a Terminal High-Altitude Area Defense (THAAD) battery in Korea during the Park Geunhye administration, which triggered a security row between the U.S. and China. China's retaliation after the THAAD deployment significantly hampered Korea-China relations.

The government should establish a clear position on how to deal with the aftermath of the Huawei boycott and protect local industries from becoming victims of the raging tech war between the world's two biggest superpowers. Korea should also focus on staying ahead in new-generation technologies to survive in the global tech competition.