Tuesday, June 22, 2021

How America Turned the Tables on Huawei

Excitement about China’s digital advancement was high when Keith Krach last visited China as CEO of the highly successful software company DocuSign, with its more than 400 million users in 188 countries.

‘I saw a lot of new technology. I saw the drone swarm technology. “Everyone told me to download Tencent every 30 minutes,” Krach said. Tencent is the multinational conglomerate behind China’s popular WeChat app.

That was in December 2017. Today, Krach is close to the list of Americans who, along with their loved ones, are banned from visiting China again or doing business with Chinese institutions.

Former Secretary of State Mike Pompeo “was number one, [former trade policy adviser Peter] Navarro number two, “I’m number three” on the list of former Trump administration officials, Krach said in a recent interview.

Twenty-eight people were hit with the sanctions, which were announced on January 20, minutes after US President Joe Biden was sworn in.

‘Shot over their bow’

While the sanctions are focused on those leaving office, Krach said he believes it is intended as a warning to members of the incoming Biden government, including Foreign Minister Antony Blinken and the coordinator of the White House Asia, Kurt Campbell.

‘It’s a shot over their bow – you know, just enough to make them hesitate – and it makes a difference. For me, it does not affect me. I’m at a different station in life, ”Krach told VOA during a recent visit to Washington.

Krach became a US Secretary of State for Economic Affairs in March 2019 and remained in office until the end of President Donald Trump’s term.

“My task has been to develop an operational global economic security strategy to promote global economic growth, maximize national security and combat China’s economic aggression,” he said.

A year in the post has ‘made the issue of 5G really urgent’, he said. “Huawei has announced that it has 91 global contracts, 47 in Europe. They seemed to be unstoppable, [that] they are going to run the table. ”

Krach’s job was to turn the table.

FILE – Information about Huawei’s 5G equipment will be seen on a screen during the World 5G exhibition in Beijing, China, November 22, 2019.

The United States began warning allies and partners in 2019 that the fact that Chinese telecommunications company Huawei was building their 5G telecommunications infrastructure posed a danger that their citizens and their official data would be exposed to Chinese state oversight. The Trump administration has argued that countries should keep Huawei away, both for their own sake and for the sake of collective security among democratic allies.

Huawei has repeatedly reaffirmed its independence from the Chinese government, although it is described in China as a ‘state champion’ and a Administrative Department of the Communist Party embedded in its corporate structure.

One by one, Krach and his team deployed dozens of allied countries and telecommunications corporations in what became known as a Clean Network. ‘By the time we’re done, [Huawei] probably had about a dozen and a half ”contracts left, almost 100, Krach said.

Building what US officials called an “alliance of democracies” to ensure technological independence from Chinese state-subsidized enterprises has not always been easy. If the Chinese authorities, as Krach said, tried to intimidate incoming U.S. officials, the same scare is used for government officials and businessmen in other countries.

Fear of retaliation

“In the bilateral meetings, it was clear that everyone was afraid to talk about China or Huawei. The elephant in the room was retaliation, retaliation from China, ”Krach recalls. A large part of the Clean Network is therefore [providing] a ‘safety blanket’, because there is strength in numbers and there is power in unity and solidarity. ”

NATO Deputy Secretary-General Mircea Geoană and EU Internal Market Commissioner Thierry Breton were natural allies who needed no conviction that the political, economic and security alliance between democracies was as strong as our weakest link. “was not,” Krach said.

But to counter Huawei effectively, the Alliance of Democracies also had to control the technology and hardware needed to build 5G systems. According to Krach, the Taiwanese Semiconductor Manufacturing Company has been persuaded to build a leading plant in the US, while the Trump administration imposes export controls that deprive Huawei of essential semiconductors and related technology.

FILE – A pamphlet asking employees to protect the confidentiality of the business will be seen on August 31, 2018 at a reception at the Taiwan Semiconductor Manufacturing Company, in Hsinchu, Taiwan.

“First you see Huawei start to lose momentum, then you see the tide start to turn, then the tide turns, then the tide turns,” he said.

Krach believes the two U.S. political parties have made a continued dual effort to confront the “China challenge,” and he hopes his efforts as secretary of economic affairs have provided a “lead” for the Biden government.

He also hopes that the ‘alliance of democracies’ can continue to flourish, and that Biden’s ‘buy-American’ initiative can be combined with the purchase of products from allied countries and partners. “Why not do free trade under the Clean Network?” he said.

Travel from Ohio

Krach was born in April 1957 in what he described as ‘small town Ohio’.

“My father ran a machine shop, and my mother was a teacher,” he said. ‘My father’s customers were suppliers to the Big Three car companies in Detroit, and his fortune depended on them. … In times of boom, we scrambled to fill large orders; in bad times I was his only employee. ”

Krach told members of the U.S. Senate during his confirmation hearing that his father “dreamed that I would get ‘college knowledge’ and return as an engineer to help him grow the machine shop into a large enterprise of ten employees. “

The boy never went to work with Dad in Ohio again, but became the latest vice president at General Motors and later a billionaire inventor and corporate CEO before joining the State Department.

Krach is now back in California, but is happy with his time in government.

“We say in Silicon Valley, ‘Corporate responsibility is social responsibility.’ “Well, corporate responsibility is also national security, because companies would not be without the United States, without democracy, without capitalism,” he said.


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