The Huawei story is an epitome of the irreconcilable schism between China and the US

So far, it looks as if the negotiations scheduled in the first half of 2019, are structured to allow both the heads of state to go back to their stakeholders with some sort of victories, leaving the broader differences on state involvement in the economy, intellectual property rights and market access – largely unchanged.

That the larger institutional conflict remains alive, despite these soothing assurances from the political leaders of both countries, was highlighted in the comments on February 1 by the US Ambassador to the European Union, Gordon Sondland.

It is to be noted that Huawei is involved in or is expected to bid for installation and management projects for 5G Infrastructure in a number of European countries, including Poland, France and Germany. Australia and New Zealand have already heeded US’ concerns, banning Huawei equipment in 5G carriers; this has created an impression, at least in the eyes of the Chinese government that trade tariffs and the case against Chinese global technology players are two prongs of the same battle strategy- to block its rise as a technological and global power. These comments come not long after US government prosecutors filed charges against Huawei on January 28, alleging theft of trade secrets and bank fraud by committing a violation of US sanctions against doing business with Iran. It is to be noted that the current CFO of Huawei, Meng Wanzhou, who also happens to be the daughter of the company’s founder Ren Zhengfei, is also indicted as guilty in the lawsuit against Huawei.

As with the dispute over China’s trade surplus, which eventually led to the trade war that riled the international financial markets last year, is there a way to amicably resolve the US misgivings about the Chinese firms? I believe that rapprochement is likely to be more difficult than a resolution to the trade war. The reasons behind it lie in the differing view that Chinese and US governments have about the reach of the government, independence of institutions and of each other’s ulterior motives.