For all the media coverage of the dramas of the Middle East, the excitement of the American presidential race and the fragility of the euro, there is no single issue more important to the world than managing the rise of China. Inevitably, the emergence of a new, major power is perceived to be a challenge, even a threat, to the status quo powers, in particular the US.
The challenge for the Americans and their allies such as the EU and Australia is to manage the rise of China. This requires and will continue to require deft diplomacy. On the one hand, pursuing a policy of containment would be disastrous. To call China an enemy will make it an enemy. China is not the Soviet Union. It is not trying to change the world, to impose its political system on others or to drive America out of the Pacific.
China wants security within its borders, which it defines as including Tibet and Taiwan. It also wants to be able to keep its vital sea lanes open. And certainly, it and Taiwan maintain their historic claims to much of the South China Sea.
But, above all, Chinese leaders want to lift the living standards of their huge population. That is the national imperative. That's to the benefit of not just the Chinese but the world. The Chinese economy makes a major contribution to global gross domestic product growth. It's a lucrative market for the developed world and it's a source of competitively priced goods. And, increasingly, it's a source of science and technology.
It's into this environment that the US House of Representatives Intelligence Committee has published a report on Chinese telecommunications companies Huawei and ZTE, calling for them to be barred from all American government systems, banned from buying any American companies, and recommending all American telcos avoid purchasing any of their equipment.
The Economist magazine most aptly described the report in saying it "appears to have been written for vegetarians. There is not much meat in it."
The report was heavy with allegations but completely lacking any evidence. This is not a report that contributes constructively to managing that most important of bilateral relationships - the Sino-American relationship - in a mature and calm way. It treats China as a hostile power, as an enemy akin to the Soviet Union during the Cold War.
As one of only three independent directors on Huawei's local board (the only local board anywhere among Huawei's 150 global offices), I would be very interested to see or hear any evidence of wrongdoing or risk posed by Huawei. The fact is I haven't, and the US congressional committee has failed to provide any in its report. It is merely supposition that Chinese companies in the telecommunications area are some sort of a threat to security.
I also would note that the accusations thrown at Huawei are changing. A few years ago it was that Huawei was a threat, but now the tone has changed to a claim it could become a threat, underlining the fact there is nothing more than allegation upon allegation with no facts or evidence.
As John Suffolk, Huawei's global cyber-security officer and a former chief information officer for the British government, told The Economist, "I can't work with ifs, buts and maybes."
That in itself is a problem and creates the second flaw with this report. The report focused on cyber vulnerabilities but has done nothing to make US telco networks safer. China may or may not be a source of risk but Huawei is not China. This investigation focused on two companies that are headquartered in China but turned a blind eye to the other major companies that are manufacturing, assembling and programming in China.
If they were truly concerned about the security of the US networks they would have focused on the fact all major telecommunications equipment companies such as Cisco Systems, or European companies such as Alcatel-Lucent and Ericsson manufacture in China. In Australia, for instance, 53 per cent of all our telco equipment is imported from China.
Does the committee really expect us to believe that if the Chinese government were inclined to put vulnerabilities into the telco infrastructure, they would use only Huawei or ZTE? This is not a Dick Smith "buy local" campaign. If they did pursue such methods, they could just as easily use Alcatel-Lucent, Cisco Systems, Ericsson or Nokia Siemens equipment as well.
Alcatel-Lucent's main Asian manufacturing plant is only a few kilometres down the road from Huawei's Shanghai campus; in fact, Alcatel-Lucent's factory is a joint venture, half-owned by the Chinese government. If the risk is real and China is the source of that risk, as outlined in the US report and the blocking of Huawei from the Australian National Broadband Network, then do they truly expect us to believe that these factories and workplaces are somehow not vulnerable?
Cyber threats are real and are not particular to China. All significant governments, organised crime, vigilante groups, terrorists and individual hackers pose risks to our telecommunications infrastructure. We need to get serious about working on solutions and policies to make our global networks safer. With technology advancing and changing every day, no single group, company or even country has all the answers. We need to work together and face the challenges together.
Exclusion will not work; in fact, I would argue, given the innovation and leadership coming from companies such as Huawei, it increases the risk. The committee's report failed to make US telecommunications networks safer but worked worryingly on the premise that we are in some sort of telco cold war with China.
Let's hope Australia can demonstrate some more productive solutions than old-fashioned protectionism.