Angela Huyue Zhang

Opinion | Should China wield antitrust laws to counter US attacks on Huawei amid global tech competition?

Beijing sees a tit-for-tat strategy as essential to ensuring US cooperation. But weaponising laws could send conflicting signals to businesses, even as a new law US law targeting Huawei is unlikely to succeed

Reading Time:3 minutes

Why you can trust SCMP

Huawei rotating chairman Guo Ping speaks during the Huawei Global Analyst Summit 2020 at the Huawei headquarters in Shenzhen, Guangdong province, on May 18. Huawei has assailed the latest US move to cut it off from semiconductor suppliers as a “pernicious” attack that will sow chaos in the global technology sector and other industries. Photo: AFP

Angela Huyue Zhang

Published: 10:30pm, 26 May 2020Updated: 4:24am, 27 May 2020

The US Commerce Department recently announced a measure that will ban Chinese telecoms giant Huawei and its suppliers from using US-made machinery and software to design or produce chips without obtaining a US licence. Many in China perceive this move as aimed at strangling Huawei to maintain American technological hegemony.

The Global Times, a Chinese newspaper that channels the views of hardliners within the government, said “China will take forceful countermeasures”, such as putting US companies on an “unreliable entity list”, launching investigations into US technology companies such as Qualcomm, Cisco and Apple for violations of antitrust and internet security law and halting China’s purchase of Boeing planes.

The government’s response echoes a classic tit-for-tat strategy. Start by cooperating, but as soon as your opponent defects, punish them. After the opponent receives their punishment and learns their lesson, they will think twice before attacking you again.

China is not using this strategy to start a war; rather, tit-for-tat is China’s strategy to maintain peace. In China’s eyes, the key to ensuring US cooperation is the credible threat of punishment. This is only possible if China has the capacity to strike back. This goes back to the insights of Nobel laureates such as Robert Aumann and Thomas Schelling, who applied game theory to the study of war and peace.

05:22

Huawei founder on cybersecurity and maintaining key component supply chains under US sanctions

This is not the first time the government has wielded the antitrust law as an instrument of trade and foreign policy. During US-China trade negotiations in 2018, China reportedly withheld antitrust approvals of large merger transactions as leverage against the Trump administration’s aggressive trade strategy.