More growing pains for the new world order. Chinese telecoms equipment maker Huawei is having a tricky time in America. This week, a US government committee that vets deals on national security grounds failed to approve Huawei’s $2m acquisition of patents and staff from start-up 3Leaf. Huawei is appealing directly to President Barack Obama.
The details are vague, but Washington has long suspected Huawei of being too chummy with China’s military. The company, meanwhile, says it is 100 per cent privately owned and has only legitimate aspirations in the US. Mixing politics with global business is always messy. But as ever more companies from emerging countries seek to expand around the world, governments, companies and investors need to get real about international investment.
First, governments must realise that any interference to open trade and investment will be regarded as protectionism, even if there are genuine security concerns. In the Huawei case, US politicians must weigh their suspicions against the possible cost of Beijing retaliating by making life difficult for US companies in China. In general, countries are co-operating better – annual World Trade Organisation disputes are running at half the level of a decade ago. Still, disagreements can escalate.