In the competition in the era of science and technology, communication technology is undoubtedly one of the key areas. However, as the U.S.-China tech war continues to heat up, Chinese telecommunications giants such as Huawei and ZTE are in an unprecedented predicament – being permanently banned from the certification process by the US FCC means that their way out of the US market is seriously hampered.
This decision is likely to have a huge impact on the global communications industry, and Chinese companies will face both opportunities and challenges. Let's analyze the root causes of this storm and look forward to the future development direction of China's communications industry.
Overnight dust: China's telecommunications giant is in trouble
Chinese telecommunications companies such as Huawei and ZTE have a considerable share of the world, especially in the field of 5G network construction. But since 2018, their development in the US market has been stymied.
According to data, as of 2021, Huawei has signed 103 5G commercial contracts in 49 countries and regions around the world, accounting for 30% of the global 5G market. However, since being added to the U.S. "Entity List," its operations in the U.S. have come to a near standstill.
On May 1, 2023, the FCC announced that it would permanently ban Huawei, ZTE and other Chinese companies from participating in the certification of wireless devices, which is undoubtedly another major blow to Chinese communications companies. Industry insiders point out that this could cost them billions of dollars in economic losses and further hinder their market expansion in the United States and other allied countries.
As the world's largest supplier of telecom equipment, Huawei has ambitiously called for building "a shared, win-win, open, secure, and transparent intelligent world." However, the reality is so cruel.
Difficulties in the communications industry: The global landscape is changing
The U.S. government's ban is not only a crackdown on Chinese companies, but also reflects the irreconcilable competition between China and the United States in key technology areas. ICT is seen as the new strategic high ground, and whoever controls the technology has the right to speak.
Communication technology is a global pattern, and the conflict between China and the United States will inevitably spread to other regions and countries. Even if it is not a direct ban, there may be barriers and blockades in terms of technology, standards, etc. In the past 10 years, Chinese companies have completed the construction of 4G networks in many countries, which has also paved the way for 5G. But today, traditional markets such as Europe, Africa and Asia-Pacific are also at risk of being implicated.
An industry analyst commented: "The development of communication technology requires global cooperation, and if there is a technological fragmentation or market fragmentation, the entire industry chain will be severely impacted." The gains of the past 10 years may be in vain. "
What are the opportunities for China's communications industry?
In the face of the predicament, how should Chinese enterprises deal with it? People in the industry believe that it is necessary not only to actively deploy in the domestic and foreign markets, but also to increase technological innovation and promote the upgrading of the industrial base and the leap in overall strength.
The domestic market is the foundation of the foothold, and it is necessary to continue to increase investment, promote the upgrading of network infrastructure, and inject new momentum into China's 5G development. As early as 2019, China has issued 5G commercial licenses, becoming the world's largest single market for 5G commercialization. In the next few years, 5G construction will continue to be the focus of the domestic market.
Chinese companies can focus on overseas emerging markets. There is a strong demand for 5G networks in these regions, and they are willing to welcome the participation of various forces, including China. For example, according to the National Development and Reform Commission, Chinese companies have opened more than 90 5G networks in 57 countries along the Belt and Road.
China should also make every effort to promote independent innovation, overcome bottlenecks in key core technologies, and reduce dependence on foreign countries. The reason why Huawei and ZTE have been affected is also related to their dependence on American chips. Only by improving the ability to speak can we truly establish the right to speak.
"Although the US ban will have a certain impact on Chinese companies overseas. However, in the long run, it is precisely the opportunity for China's communications industry to take root in the domestic market, expand emerging markets, and promote independent innovation. One expert said.
How do we act?
So, how should Chinese companies seize these opportunities and push the telecommunications industry in a better direction?
Huawei, for example, has been actively promoting technological innovation despite being suppressed by the United States. For example, Huawei's HarmonyOS and Ascend AI processors have undoubtedly laid a solid foundation for building an independent and controllable software and hardware ecosystem. At the same time, Huawei has also made significant progress in 5G construction in Saudi Arabia, Russia and other regions.
Another example is ZTE, the company clearly put forward the "1+N" key project group strategy, focusing superior resources to break through key technologies such as AI chips, PON, core routers, and high-end servers, and creating differentiated competitive advantages.
It can be seen that overcoming difficulties is a key step in the growth of Chinese enterprises. At the same time, government support and regulatory constraints will also escort the development of the communications industry.
"Now, we are in the midst of a once-in-a-decade change, with both challenges and opportunities. China's 5G industry is waiting for a turning point and take-off, as long as we remain humble and face up to the gaps and shortcomings, the future 5G world will definitely shine...", an industry expert said with confidence.
The development of communication technology is inseparable from globalization, and getting rid of foreign dependence is a major issue for Chinese communication enterprises. So, how to promote independent innovation on a global scale, and how to integrate with international standards to achieve mutual benefit and win-win results?
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