US Business Insider's article on July 29, original title: Disabling Huawei or damaging Britain's technological ambitions.
I visited China last year and knew that this country is good at technological innovation. I was pleasantly surprised to find that China’s science parks are not only the world’s leading R&D centers, but also welcome British start-ups. I have also met investors who are very interested in British innovation, especially in medical technology, artificial intelligence, Internet of Things and other deep technology fields.
Therefore, the British government's decision to ban the use of Huawei's 5G equipment is unacceptable. This decision caused a deterioration in the relationship between Britain and China and jeopardized British start-ups' access to China's growth funds and access to the world's largest market. The British government took the risk of dumping the baby and bath water together, seriously affecting the country's vision for the future: building a prosperous economy based on early in-depth technological research and development.
We are not without lessons. Before the escalation of the Sino-US trade war, the United States was the main foreign recipient of China's venture capital, and its position was quite stable. Now, many Chinese funds—both state-owned and privately held funds—have been significantly less active in the United States. Rongding Group, which pays attention to investment trends in China and the United States, found that in 2018, there were 236 investments into US companies (each with at least one Chinese investor), amounting to 10.8 billion US dollars. There were only 163 transactions in 2019, totaling US$6.5 billion.
Britain once had good conditions to take advantage of the cooling of Sino-US relations. In recent years, China's investment in Britain has continued to increase. In fact, China has invested more in the British economy in the past five years than in the previous 30 years.
Judging from my exchanges in China, the Chinese are concerned about the United Kingdom, while their attention to the United States has decreased. However, since Huawei was banned, some contacts have hinted at adopting a hedging strategy. While formulating plans for the UK market, they are also deploying in competitive ecosystems such as France, Germany, Finland and Poland.
The British government's ban on Huawei may trigger a reaction similar to that encountered in the United States and hinder the inflow of Chinese capital to support the development of British innovative companies.
China has played an important role in building infrastructure to promote the science and technology strategy of the British government. For example, through academic cooperation, it established a £25 million marine research center with the University of Nottingham; in deep technology, it established York University-Nanjing University Spintronics International Joint Center. According to the Russell Group, China is one of the UK's most important research, innovation and education partners, and the UK's second largest research partner. Britain has surpassed Japan to become China's second largest partner.
Huawei itself has led a number of projects that can contribute to the British ecosystem, including an initial investment of £1 billion in a new chip research and development center and surrounding infrastructure at the University of Cambridge, and a new 5G in the West London campus of Imperial College London. Support the technical center to invest 5 million pounds.
After the government banned Huawei, it remains to be seen whether these two projects will continue, and broader R&D investment and cooperation have definitely become problems, which may seriously weaken the British government's "science superpower" plan.
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