ITIF says WTF on Huawei, ZTE

The Information Technology and Innovation Foundation (ITIF), a US-based think tank, has jabbed a finger of accusation at China over what it sees as unfair and mercantilist policies – read state subsidies and protectionism – to support Huawei and ZTE.

Without them, claimed ITIF, "China would lack a globally competitive telecom equipment industry." The think tank went so far as to assert that neither Huawei nor ZTE would have more than minor market shares, even in their own backyard.

China-bashing of this sort will surely be welcomed by President Donald Trump, who has attempted repeatedly to curb Huawei's power on the international stage through various sanctions, arguing that the China supplier poses a threat to national security.

For its part, however, ITIF is a highly respected outfit and widely viewed as non-partisan. It seems highly unlikely to be playing party politics, but its polemic against China's trade policies on telecoms equipment is nonetheless a scathing one.

The think tank goes on to argue that Chinese market-share gains have "come at the expense of innovative telecom equipment providers in other countries." Thanks to Chinese vendors "artificially" taking market share from more innovative companies, continued ITIF, the latter have had less revenue to invest in cutting-edge R&D.

"As a share of sales, leading non-Chinese equipment companies invest more in R&D," said the think tank. In turn, it went on, they have disproportionately contributed more to international standards and patents than their Chinese counterparts.

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ITIF then made what seemed a startling estimate. If Ericsson and Nokia took all of Huawei and ZTE sales, it reckoned there would be 20% more global telecom equipment R&D and 75% more essential 5G patents.

In a call to "democratic market-based nations" – its rabble-rousing tone would not look out of place at a Trump rally – ITIF said "they should no longer purchase equipment from Huawei and ZTE, and should encourage other nations to not buy Chinese telecom gear."

ITIF thumped on: "This will send a clear message to China that, going forward, systemic innovation mercantilism that hinders global technological innovation will no longer be tolerated."

— Ken Wieland, contributing editor, special to Light Reading

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