The horizon is not so far as we can see, but as far as we can imagine

What the Huawei Row Portends for the Future of America, China, and Canada

Huawei is a giant Chinese telecom company. It produces fifth-generation telecom equipment (5G), cell phones, and much more. Its 5G equipment is probably the most advanced in the world.

The US has accused it of espionage: Stealing commercial secrets. In the US, it is illegal for Huawei telecom equipment to be used for infrastructure, and the US is trying to convince other countries, especially European ones, to not use their equipment either. The rationale is that such equipment makes Chinese spying easier.

A while back, the US government asked the Canadian government to extradite a Chinese Huawei executive to the US. Her name is Meng Wanzhou, and she is the daughter of Huawei’s CEO.

Importantly, she was charged with fraud related to violating US-Iran sanctions, not espionage against American companies.

In response, China has mostly swung at Canada, arresting a number of Canadians and retrying a Canadian drug smuggler, increasing his penalty to death.

One of the US’s goals has been to separate the US and China: For example, the NAFTA rewrite, the USMCA, forbids any member from forming a trade deal with a “non-market economy” if either other member disagrees. (The US defines China as a “non-market economy.”)

It may or may not have been deliberate, but this request has made Canadian/Chinese relations much worse.

Note that the person being charged is pretty close to Chinese royalty. This is like if Steve Job’s daughter was a senior Apple executive and arrested. Imagine the furor.

But I want to highlight something else: This is about breaking Iran sanctions. (Which China did, though I have no insight into Meng’s involvement.)

The Iran sanctions were certainly legal under US law. They were not, however, in any way, shape or form, just. As with all economic sanctions they disproportionately hurt people not in the ruling class. They hit various medicines and caused a lot of suffering and death. The evidence that Iran had a nuclear weapon program was always dicey, and in any case, that America has the right to deny nuclear weapons to other countries is unclear.

So Meng is being prosecuted for a political crime. She is being prosecuted because her country decided not to obey US laws with respect to another country. US laws which are unjust on their face.

To me, at least, this is illegitimate. China’s counter-strikes are also illegitimate: Canadians should not be used as cats-paws in this, and China’s actual issue is with the United States, not Canada. That said, from a realpolitik point-of-view, I entirely understand China making the point that acting on behalf of the US in its near-cold war with China will have negative consequences.

This row has continued to accelerate. There is a fair bit of danger, in the medium-run, that the world is going to split into two economic blocs, and enter something close to a cold war again.

The US wants China to do what the US wants, which is for them to remain a regional power, not a great power, to not take control of its near abroad (as the US did in the 19th and early 20th century, in much more violent fashion than China has so far), and China, a rising Great Power (and potential superpower) will not be stifled in this way. No rising great power, certainly not the US, ever was or will be.

This road, though we are early on it, leads to war. There are things China does that are illegitimate, but its power will have to be accommodated, just as the US’s was. (Take a look at the map of the Canadian province of British Columbia, notice the Alaska panhandle: It is complete bullshit, and it was obtained because Theodore Roosevelt was willing to go to war to get it, and the British, preoccupied elsewhere, weren’t willing to fight him for it.)

As for Meng, she is clearly a political prisoner and pawn, as are all the Canadians that China has arrested in retaliation.

While it’s unlikely to happen, because Americans think they have the right to apply their law to anyone, anywhere and to kill anyone they want in most countries in the world, without even a trial, sensible politics would be to de-escalate this.

Locking up Meng, which is most likely (US prosecutors generally get their victims) will be a running sore. America is banking on Chinese fear outweighing Chinese anger. Maybe it will, for a time, but the Chinese strategic tradition also includes a hell of a lot of smiling at enemies until you can stomp them flat.

The US ought to think very carefully on that, and whether or not it really wants to go down this road, especially over such an unjust charge.

As for Canada, it is an American subject state, and, as the USMCA proved, when America gets serious, Canada does what it is told. I have explained this to Canadians for a couple decades now, including the need for an actual deterrent (it needn’t be nuclear), but Canadians think the US is Canada’s friend, not overlord.

This mistake, too, will continue to be punished.

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  1. Adams

    Can somebody explain to me why US has standing UNILATERALLY to impose its sanctions on other sovereign governments and/or corporations and even individuals? Please. Also why able to arrest (extradite) a foreign corporate exec for violating those sanctions. Thanks.

  2. Jeff Wegerson

    That’s easy, even I know. Standing comes from power.

  3. marieann

    I don’t know any Canadians that retain a rosy picture of the US.

    I live in a border city and we work and shop in the US, we also watch US TV and Radio because our small town we can’t compete with the larger cities.
    Even with all that, while we love the people we interact with, the US politics leaves us cold and angry.

    Most I talk with are really,really annoyed at our PM for getting into this mess.

  4. so

    I can’t understand why my fellow americans don’t like fences. I say we surround the whole border with a 15 footer. No doors. I think its high time we give the rest of the world a break from us.

  5. Hugh

    2030. Russian and Chinese imperial ambitions are based on exploiting a world order which they did not create and have no interest in maintaining, and which will soon cease to exist not because of anything they may or may not do but because of climate change and overpopulation. And the key date in all this is 2030. That’s just eleven years from now. The US both as nation-state and hegemon has basically done nothing to prepare for what’s coming. Even so, it cannot be overstated how dependent Russia and China are on the world order the US with its allies created. So if the US is unprepared, they are even more so.

    Huawei is sort of typical of the new Chinese powerhouses. They grew rapidly because they had a large internal market they could tap into and could export cheaply. Their rapid expansion was also based on iffy connections with the Chinese government, an anything goes approach to markets, and making theft of the intellectual property of their competitors part of their business model. Now that Huawei is a major player, these factors are coming back to haunt it.

    The Meng Wanzhou episode is not so much a one off, but of chickens coming home to roost. You can see it as a reflection of Chinese power that those countries who can are either reducing Huawei’s penetration of their markets or excluding it entirely.

  6. StewartM

    The US criticizing Iran and the Muslim world for imposing its laws on Salmon Rushdie is hypocrisy, because we impose not only our political and economic policies but our moral code on the rest of the world without blinking (say, at airports arresting foreign producers who made adult films involving people younger than 18, but above an age that was still completely legal in their country, but illegal in the US). If you ever have violated any US law, even though it was not illegal in your own country, be very wary of ever taking a flight that has a stop in the US.

  7. nihil obstet

    Why would anyone think China would respect American intellectual property a nanosecond longer than it benefited China to do so? The U.S. routinely invades oil producing countries for the benefit of American corporations, but has staked its continued economic dominance on other countries’ observing U.S. patents and copyrights? Silly.

  8. Kfish

    @Adams: A large part of US sanctions power comes from the fact that international money transactions come through New York via the SWIFT system, giving the US leverage through threatening to disrupt payments to other countries.

    Recently, the IRS demanded that Australian banks hand over confidential information about assets and transactions from their customers who were living in Australia but also American citizens (the US taxes its citizens according to US law no matter where they live in the world). Australia said no way; the US said fine, we’re imposing a 30% tax on every transaction through the SWIFT system headed for Australia. Australia folded because it had no choice.

  9. “Canadians should not be used as cats-paws in this…” Canada walked into this under its own power and with its eyes wide open. It was they who arrested the lady on their soil, and it is they who are holding her. That they did so at the request of the US is irrelevant to the Chinese, which is as it should be. It is actions that get punished, not intentions.

    Except by America, of course. You can be terminated by a Hellfire missile merely for thinking bad thoughts about this nation.

  10. Tom

    @ Bill H

    Intentions are not even needed. You can get Drone Struck simply because a Drone Operator thought you looked suspicious or for kicks. Hence all the people killed while herding sheep, driving a car, or attending weddings.

  11. Hugh

    US patents run 20 years. It’s the length of copyrights which is ridiculous. But if countries can violate patents and copyrights at will, then there is no reason to have them. Ditto labor, safety, and pollution standards. Try to run an international trade system on that basis. Just today it just came out that the FDA was flagging several generic drugs out of India and China because they were contaminated with carcinogens. But in an anything goes world, the only response to such episodes is to ban the companies from your markets. If they steal your tech, ban them. If they do anything else you don’t like, ban them. It’s a slippery slope. Pretty soon you have banned all their products. They have banned all yours. And there is no trade. This would not make sense in the best of circumstances.

    About all I can say is good or bad it will soon, as in by 2030, be irrelevant. Like passengers on the Titanic, too many of us can not imagine our ship sinking. But the twin icebergs of climate change and overpopulation are dead ahead of us and the world so many here complain about and yet can not managing being without will fail.

  12. Hugh

    managing = imagine

  13. Scott

    What would the deterrent Ian speaks of be? Since the Cold War, the US effectively has operated without any meaningful constraints. While those constraints might be useful to prevent some of our damaging (and self-damaging) behavior, I’m at a loss to know what deterrent a medium sized country like Canada or others could adopt to achieve that result. Just curious.

  14. Ian Welsh

    There are non nuclear weapons capable of vast destruction. Canada builds very accurate missiles. We are the second largest country in the world. You build those weapons, you put them on mobile launchpads and you move them around Canada more or less randomly. Done properly, they cannot be taken out. In the case of an invasion, you use them. This is second strike capacity. Of course America will not nuke us (they aren’t quite that insane) but those who think they aren’t stupid enough to try to annex us are quite wrong.

    These aren’t crude missiles with small payloads.

  15. Senator-Elect

    This is excellent, as usual. Thank you.

    Is this a typo? “One of America’s goals has been to separate America and China…” Should it be “…separate Canada and China…”?

  16. Some Guy

    “that said, from a realpolitik point-of-view, I entirely understand China making the point that acting on behalf of the US in its near-cold war with China will have negative consequences.”

    I agree with most of what you wrote, but not the above. To be honest, I have been mystified, and a little concerned about the Chinese response. Canada is probably the most China-friendly nation in the West and is also one of the U.S. most key allies. China could have taken a soft line on Canada, saying, ‘we understand the mean Americans put you in a bad spot, we would never act like that, this is why you need to separate yourself from the U.S., etc.’

    But instead they went all loony tunes in a fit of absurd arrogance that pushed Canada strongly towards the U.S. and away from China. I’ve always taken it as a given to try and divide your enemies and unite your friends, and on this metric, the U.S. has clearly won this round and China has clearly lost – and for what gain?

    Maybe China has some reasons for their actions here that make sense that I just don’t get, but the part that worries me is that maybe they’ve just been on a roll for so long that they have become really arrogant and are starting to make the kind of dumb mistakes made by the arrogant all the time. If that is the case, then things could get ugly as their view of themselves as invincible is inevitably punctured…

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