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China is rolling out a 5G network faster than anyone else
Gwynn Guilford
19 hrs ago
Even if you’ve absorbed nothing else about 5G, you almost certainly know these three things: There’s a race to build it. China is winning. And that should make you afraid. (Or if you’re in China, thrilled.)
That framing has arisen in no small part because of the US trade war with China. Though the Trump administration calls it a “trade war,” the confrontation it has drawn China into swivels mainly on disagreement over technology policies—and 5G is a major piece of that. “We cannot allow any other country to out-compete the United States in this powerful industry of the future,” said Trump in April. “We are leading by so much in so many different industries of that type, and we just can’t let that happen. The race to 5G is a race America must win.”
The potential economic impact of 5G is of course huge. The US has focused its trade war aggression on one of the key players in the 5G buildout in particular: Huawei. The Shenzhen-based company is a telecom technology triple threat. It is the world’s biggest end-to-end vendor of 5G equipment, and—along with Nokia and Ericsson—one of only three in the world. It competes with Qualcomm, among others, for patents on many key 5G technologies, and is quickly advancing in the design of critical semiconductors. It also is the planet’s second-biggest handphone manufacturer (or it was before the US government started threatening its access to Google’s Android operating system).
Huawei is polarizing. While its record of technology theft and shady business dealings make it easy to suspect of serving Chinese cyberspies, the fact that its telecom equipment is much cheaper than its Nordic competitors makes it valuable to carriers looking to contain the considerable costs of a 5G buildout.
It also makes it easy to miss that Huawei is mostly a distraction from the real logic of the “5G race with China” narrative.
That logic goes something like this. 5G is revolutionary; harnessing it is key to long-term economic growth. China is doing exactly that. In the US and most other countries, the private sector leads the buildout. That will likely hamper progress; operators need new sources of revenue to fund infrastructure spending, and 5G’s business applications are still inchoate. The Chinese government, on the other hand, is supporting 5G construction in myriad ways, as the Wall Street Journal recently detailed (paywall).
Mind you, simply flicking the “on” switch of a spiffy new 5G network won’t in itself deliver instant prosperity. That depends on the haziest, but most critical, part of the 5G “revolution”: how companies harness 5G to innovate new products and services. Countries that get 5G running first will have a big head start in innovating. (You’ll sometimes hear that a big reason the US was home to the most recent wave of consumer-facing mobile innovation—Uber or Snapchat, for example—is that it was the first to roll out 4G at scale.)
Therefore, goes the logic, because China is taking the lead in mastering 5G technology, it will also pioneer the layer of innovation that follows. Alibaba and other homegrown firms will gain an advantage in claiming patents based on cutting-edge technologies like AI, autonomous vehicles, mobile industrial robots, mass-scale Internet of Things—allowing them to corner global markets. On top of that, the opportunity to experiment with China’s state-of-the-art 5G network will attract world-class engineers and entrepreneurs from all over. Capital will follow. China’s tax base will swell. And the surge in productivity—the ability to produce more goods and services more cheaply—that results will buoy China’s long-term prosperity at the expense of the US and other nations.
It’s true that the Chinese government has indeed long prioritized 5G in its industrial development policies. It’s also investing billions to roll out 5G fast. Critically, it plans to launch a standalone network—the second phase of the buildout that is expected to transform businesses by supporting mass-scale Internet of Things and mission-critical connectivity—by next year, five years before anyone else. However, the “race” narrative rests on shaky assumptions about how easily 5G can be launched and how technological progress plays out.
First we have the “race” trope. Though profoundly misleading, there is a kernel of legitimacy to it. Unlike previous mobile wireless “generations,” 5G does indeed have the potential to change communications networks so radically that it revolutionizes economies. At the most basic level, it would achieve this by making computing power accessible to businesses and governments at an unprecedented scale, letting them mine data into an actionable commodity and inviting automation of everything from driving buses to fighting fires.
None of that will occur any time soon (even optimists say the beginning of such transformation is at least a decade off). And that process sure won’t be smooth. Commercialization of new, life-improving technologies usually proceeds in a lurching, hard-to-predict fashion. Neither the amount China has invested nor the number of 5G cells it has installed helps us gauge success. There is a lot about 5G technology that hasn’t yet been proven. And the most important part, the pioneering of 5G-based applications, is embryonic. If past technological leaps tell us anything, it’s that it will take a lot of trial and error—and, above all, time—to start reaping genuine, self-sustaining returns from 5G technology.
That’s not to say there’s nothing to learn from China’s approach. States have long been essential to pushing the technological frontier forward. The computing revolution that began in the 1960s is an example of the important role governments (in this case, the US) can play in creating markets for and investing in critical technology.
But this can backfire too. After all, investments that are bets that one technology will prevail always have an opportunity cost—and the bigger the bet, the bigger the risk of long-term setbacks. Take, for example, Japan’s “race” to master the supercomputer, which contributed to its falling behind in the personal computing revolution, as Tim Wu, a Columbia Law School professor and expert on network technology, explains in our State of Play. At the same time, subsidizing national champions to develop new technologies can boost their R&D in a way that helps them dominate markets. But there’s a very real risk, too, of discouraging Schumpeterian creative destruction and the innovation that tends to result.
The same dynamic could apply to China’s ambitious plan to launch a standalone 5G network way earlier than everyone else. It could give Chinese tech firms an advantage in developing AI and other cutting-edge 5G-based technologies. Or it could push them down a technological cul-de-sac. In that sense, by forcing operators to roll out 5G-based services more incrementally, the US’s private sector-led 5G buildout could prove less wasteful and more profitable in the long run. Ultimately, there are tradeoffs to both approaches. It’s way too early to determine which is “victorious.”
For those reasons, it’s also more than a little premature to get worked up about who is winning and losing the 5G race. Politicians who use this prospect to scare their people or puff them up are indulging in techno-nationalist propaganda.
But if this national rivalry narrative persists, eventually there could well be something to fear.
The Trump administration has opened in a new trade war front by trying to cut Chinese companies out of the technology supply chain—a move that White House officials explicitly link to China’s 5G plans.
“The whole China game plan, the China 2025 [industrial policy], is to dominate not just 5G but artificial intelligence, blockchain technology, and we can’t let that happen,” Peter Navarro, Trump’s trade adviser, told CNBC in July. “President Trump is a visionary on this, and he’s put his foot down, and we’re going to make sure that the US is the innovation leader. And, more importantly, after we innovate, we keep our technology and our IP [intellectual property].”
The problem, as the administration sees it, is that China’s domination of technology supply chains threatens the US technology leadership and, therefore, national security. Citing these “supply chain vulnerabilities,” the Trump administration declared a national emergency in May.
While largely speculative, these fears aren’t exactly groundless. For a hypothetical example, consider the Bloomberg Businessweek report from Oct. 2018, which has never been independently confirmed, that People’s Liberation Army agents forced Chinese manufacturers to let them hack the servers they sold to major US tech and finance firms by sneaking Tic Tac-sized chips on to the motherboards. The manufacturer in question and its customers denied the allegations.)
There are (quite literal) costs to this strategy (which is frequently referred to as technological “decoupling” or “balkanization”). For one, it’s liable to punish US tech companies in a way that could harm long-term competitiveness, says Paul Triolo, head of Eurasia Group’s geo-technology practice.
“Qualcomm and Intel and these companies get huge amounts of their revenue from China because it’s such a big market. They can generate a lot of revenue that they plow back into R&D. That enables them to innovate both for the US market and for China,” he says.
American consumers will feel the hit too. The scale made possible by China’s huge, dense manufacturing base lowers prices of smartphones, computers, and other super-complex devices.
“Because nobody has tried to do this before, the full impact of [decoupling] is hard to predict,” says Triolo. “But it certainly is gonna mean less innovation, higher costs, and slower cycles of new products.”
Herein lie the perils of turning technology into a nationalist tool—particularly in the 5G era. US policy has aligned China’s private-sector tech companies behind the government project of achieving technological independence. China’s massive size—it has more mobile phone users than any other nation, and is the world’s largest handset market—makes it much easier to create self-sustaining markets for homegrown products and services. And because 5G involves whole new technologies, the process of building 5G, and inventing applications that use it, could well accelerate that push.
Eurasia Group and others say this could lead to separate spheres of technological influence—something like a Cold War between the US and other advanced democracies that use mainly US-based technology, and a Chinese domain built on Chinese technology. Among other things, this will hamper America’s global leadership, says Nicholas Weaver, a computer security expert at the International Computer Science Institute.
“Having [supply chain] codependency was useful because it allowed us to at least somewhat enforce sanctions against Iran and North Korea and stuff like that,” he says. “But a full-on balkanization means that in the future we won’t be able to do that.”
Furthermore, the state-led nature of China’s 5G innovation could support the invention of surveillance technologies that harness Big Data and AI to give governments unprecedented control over people’s lives. China could then market this technology to other states, spreading authoritarianism hither and thither (though more probably to its Belt and Road Initiative client states).
Pushing to disentangle global technology supply chains could prove more dangerous still. After all, though globalization certainly creates many problems, one of the benefits of open flows of technology, investment and people is how it tends to align national interests in shared prosperity. That economic entanglement discourages war. But as Columbia’s Wu notes, the obverse holds too. “If you look at the origins of wars, they have to do with economic interests becoming understood as national interests,” he says, adding that while network technologies can penetrate borders, they can also serve as propagandist tools to reinforce nationalism.
Still, of all the 5G-related things that should be occupying leaders’ minds, geopolitical conflict should probably not top the list.
If 5G proves to be anywhere near as transformative as its boosters say it will be, within a couple decades, nations could face a colossal scale of societal upheaval. Mass automation and technological unemployment, erosion of traditional media and other civil society institutions, the concentration of corporate power, the intrusion of data-mining and commercialized surveillance into people’s lives—these are just a few of the potential problems that 5G will foist on governments. Explaining 5G as a race to be won will surely distract the public from those disquieting possibilities. But it will prevent exactly none of them.
https://www.msn.com/en-us/money/mar...5g-network-faster-than-anyone-else/ar-AAHTBzt
Gwynn Guilford
19 hrs ago
Even if you’ve absorbed nothing else about 5G, you almost certainly know these three things: There’s a race to build it. China is winning. And that should make you afraid. (Or if you’re in China, thrilled.)
That framing has arisen in no small part because of the US trade war with China. Though the Trump administration calls it a “trade war,” the confrontation it has drawn China into swivels mainly on disagreement over technology policies—and 5G is a major piece of that. “We cannot allow any other country to out-compete the United States in this powerful industry of the future,” said Trump in April. “We are leading by so much in so many different industries of that type, and we just can’t let that happen. The race to 5G is a race America must win.”
The potential economic impact of 5G is of course huge. The US has focused its trade war aggression on one of the key players in the 5G buildout in particular: Huawei. The Shenzhen-based company is a telecom technology triple threat. It is the world’s biggest end-to-end vendor of 5G equipment, and—along with Nokia and Ericsson—one of only three in the world. It competes with Qualcomm, among others, for patents on many key 5G technologies, and is quickly advancing in the design of critical semiconductors. It also is the planet’s second-biggest handphone manufacturer (or it was before the US government started threatening its access to Google’s Android operating system).
Huawei is polarizing. While its record of technology theft and shady business dealings make it easy to suspect of serving Chinese cyberspies, the fact that its telecom equipment is much cheaper than its Nordic competitors makes it valuable to carriers looking to contain the considerable costs of a 5G buildout.
It also makes it easy to miss that Huawei is mostly a distraction from the real logic of the “5G race with China” narrative.
That logic goes something like this. 5G is revolutionary; harnessing it is key to long-term economic growth. China is doing exactly that. In the US and most other countries, the private sector leads the buildout. That will likely hamper progress; operators need new sources of revenue to fund infrastructure spending, and 5G’s business applications are still inchoate. The Chinese government, on the other hand, is supporting 5G construction in myriad ways, as the Wall Street Journal recently detailed (paywall).
Mind you, simply flicking the “on” switch of a spiffy new 5G network won’t in itself deliver instant prosperity. That depends on the haziest, but most critical, part of the 5G “revolution”: how companies harness 5G to innovate new products and services. Countries that get 5G running first will have a big head start in innovating. (You’ll sometimes hear that a big reason the US was home to the most recent wave of consumer-facing mobile innovation—Uber or Snapchat, for example—is that it was the first to roll out 4G at scale.)
Therefore, goes the logic, because China is taking the lead in mastering 5G technology, it will also pioneer the layer of innovation that follows. Alibaba and other homegrown firms will gain an advantage in claiming patents based on cutting-edge technologies like AI, autonomous vehicles, mobile industrial robots, mass-scale Internet of Things—allowing them to corner global markets. On top of that, the opportunity to experiment with China’s state-of-the-art 5G network will attract world-class engineers and entrepreneurs from all over. Capital will follow. China’s tax base will swell. And the surge in productivity—the ability to produce more goods and services more cheaply—that results will buoy China’s long-term prosperity at the expense of the US and other nations.
It’s true that the Chinese government has indeed long prioritized 5G in its industrial development policies. It’s also investing billions to roll out 5G fast. Critically, it plans to launch a standalone network—the second phase of the buildout that is expected to transform businesses by supporting mass-scale Internet of Things and mission-critical connectivity—by next year, five years before anyone else. However, the “race” narrative rests on shaky assumptions about how easily 5G can be launched and how technological progress plays out.
First we have the “race” trope. Though profoundly misleading, there is a kernel of legitimacy to it. Unlike previous mobile wireless “generations,” 5G does indeed have the potential to change communications networks so radically that it revolutionizes economies. At the most basic level, it would achieve this by making computing power accessible to businesses and governments at an unprecedented scale, letting them mine data into an actionable commodity and inviting automation of everything from driving buses to fighting fires.
None of that will occur any time soon (even optimists say the beginning of such transformation is at least a decade off). And that process sure won’t be smooth. Commercialization of new, life-improving technologies usually proceeds in a lurching, hard-to-predict fashion. Neither the amount China has invested nor the number of 5G cells it has installed helps us gauge success. There is a lot about 5G technology that hasn’t yet been proven. And the most important part, the pioneering of 5G-based applications, is embryonic. If past technological leaps tell us anything, it’s that it will take a lot of trial and error—and, above all, time—to start reaping genuine, self-sustaining returns from 5G technology.
That’s not to say there’s nothing to learn from China’s approach. States have long been essential to pushing the technological frontier forward. The computing revolution that began in the 1960s is an example of the important role governments (in this case, the US) can play in creating markets for and investing in critical technology.
But this can backfire too. After all, investments that are bets that one technology will prevail always have an opportunity cost—and the bigger the bet, the bigger the risk of long-term setbacks. Take, for example, Japan’s “race” to master the supercomputer, which contributed to its falling behind in the personal computing revolution, as Tim Wu, a Columbia Law School professor and expert on network technology, explains in our State of Play. At the same time, subsidizing national champions to develop new technologies can boost their R&D in a way that helps them dominate markets. But there’s a very real risk, too, of discouraging Schumpeterian creative destruction and the innovation that tends to result.
The same dynamic could apply to China’s ambitious plan to launch a standalone 5G network way earlier than everyone else. It could give Chinese tech firms an advantage in developing AI and other cutting-edge 5G-based technologies. Or it could push them down a technological cul-de-sac. In that sense, by forcing operators to roll out 5G-based services more incrementally, the US’s private sector-led 5G buildout could prove less wasteful and more profitable in the long run. Ultimately, there are tradeoffs to both approaches. It’s way too early to determine which is “victorious.”
For those reasons, it’s also more than a little premature to get worked up about who is winning and losing the 5G race. Politicians who use this prospect to scare their people or puff them up are indulging in techno-nationalist propaganda.
But if this national rivalry narrative persists, eventually there could well be something to fear.
The Trump administration has opened in a new trade war front by trying to cut Chinese companies out of the technology supply chain—a move that White House officials explicitly link to China’s 5G plans.
“The whole China game plan, the China 2025 [industrial policy], is to dominate not just 5G but artificial intelligence, blockchain technology, and we can’t let that happen,” Peter Navarro, Trump’s trade adviser, told CNBC in July. “President Trump is a visionary on this, and he’s put his foot down, and we’re going to make sure that the US is the innovation leader. And, more importantly, after we innovate, we keep our technology and our IP [intellectual property].”
The problem, as the administration sees it, is that China’s domination of technology supply chains threatens the US technology leadership and, therefore, national security. Citing these “supply chain vulnerabilities,” the Trump administration declared a national emergency in May.
While largely speculative, these fears aren’t exactly groundless. For a hypothetical example, consider the Bloomberg Businessweek report from Oct. 2018, which has never been independently confirmed, that People’s Liberation Army agents forced Chinese manufacturers to let them hack the servers they sold to major US tech and finance firms by sneaking Tic Tac-sized chips on to the motherboards. The manufacturer in question and its customers denied the allegations.)
There are (quite literal) costs to this strategy (which is frequently referred to as technological “decoupling” or “balkanization”). For one, it’s liable to punish US tech companies in a way that could harm long-term competitiveness, says Paul Triolo, head of Eurasia Group’s geo-technology practice.
“Qualcomm and Intel and these companies get huge amounts of their revenue from China because it’s such a big market. They can generate a lot of revenue that they plow back into R&D. That enables them to innovate both for the US market and for China,” he says.
American consumers will feel the hit too. The scale made possible by China’s huge, dense manufacturing base lowers prices of smartphones, computers, and other super-complex devices.
“Because nobody has tried to do this before, the full impact of [decoupling] is hard to predict,” says Triolo. “But it certainly is gonna mean less innovation, higher costs, and slower cycles of new products.”
Herein lie the perils of turning technology into a nationalist tool—particularly in the 5G era. US policy has aligned China’s private-sector tech companies behind the government project of achieving technological independence. China’s massive size—it has more mobile phone users than any other nation, and is the world’s largest handset market—makes it much easier to create self-sustaining markets for homegrown products and services. And because 5G involves whole new technologies, the process of building 5G, and inventing applications that use it, could well accelerate that push.
Eurasia Group and others say this could lead to separate spheres of technological influence—something like a Cold War between the US and other advanced democracies that use mainly US-based technology, and a Chinese domain built on Chinese technology. Among other things, this will hamper America’s global leadership, says Nicholas Weaver, a computer security expert at the International Computer Science Institute.
“Having [supply chain] codependency was useful because it allowed us to at least somewhat enforce sanctions against Iran and North Korea and stuff like that,” he says. “But a full-on balkanization means that in the future we won’t be able to do that.”
Furthermore, the state-led nature of China’s 5G innovation could support the invention of surveillance technologies that harness Big Data and AI to give governments unprecedented control over people’s lives. China could then market this technology to other states, spreading authoritarianism hither and thither (though more probably to its Belt and Road Initiative client states).
Pushing to disentangle global technology supply chains could prove more dangerous still. After all, though globalization certainly creates many problems, one of the benefits of open flows of technology, investment and people is how it tends to align national interests in shared prosperity. That economic entanglement discourages war. But as Columbia’s Wu notes, the obverse holds too. “If you look at the origins of wars, they have to do with economic interests becoming understood as national interests,” he says, adding that while network technologies can penetrate borders, they can also serve as propagandist tools to reinforce nationalism.
Still, of all the 5G-related things that should be occupying leaders’ minds, geopolitical conflict should probably not top the list.
If 5G proves to be anywhere near as transformative as its boosters say it will be, within a couple decades, nations could face a colossal scale of societal upheaval. Mass automation and technological unemployment, erosion of traditional media and other civil society institutions, the concentration of corporate power, the intrusion of data-mining and commercialized surveillance into people’s lives—these are just a few of the potential problems that 5G will foist on governments. Explaining 5G as a race to be won will surely distract the public from those disquieting possibilities. But it will prevent exactly none of them.
https://www.msn.com/en-us/money/mar...5g-network-faster-than-anyone-else/ar-AAHTBzt
