China-US ties may further get strained if Trump's 5G plan moves forward.
Supposing they are, there is still the question of why the White House would consider them in the first place.
China investments in 5G mobile networks are expected to reach 2.8 trillion yuan (US$443 billion) in the period from 2020 to 2030, according to a study published past year by the China Academy of Information and Communications Technology.
The concept does seem a little out of left field, given that mobile carriers have already been working on deploying their own 5G networks for some time. "If that utility were to become operational, it would effectively offer an opportunity for an unlimited number of retail resale providers to offer wireless services capable of gigabit speeds to throughout the United States".
Meredith Attwell Baker, president of the wireless industry group CTIA, added that while 5G is important, "the government should pursue the free market policies that enabled the U.S. wireless industry to win the race to 4G".
The administration proposal substitutes China for the Soviet Union and declares: "China is the dominant malicious actor in the Information Domain". Pai said that the federal government should not build and operate a nationwide 5G network. Some are pushing for the government to build it similar to the National Highway System. It would be a moonshot unlike anything the government has taken on since it sent people to the moon. On Monday, Recode reported that administration officials said the Axios memo was outdated. Another option would leave the project to market forces, but the document states this would take longer and risk security issues.
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Another option includes having a 5G network built by a consortium of wireless carriers, said the USA official. "Eventually, this effort could help inoculate developing countries against Chinese neo-colonial behavior". Since this is a leak of a report, we have no idea how seriously the administration is taking it.
"The magnitude of the Chinese market reserved to Huawei and ZTE allows the companies to effectively fund their with domestic sales while insulating the companies against global infrastructure spending downturns". "They're smart, they're aggressive, and they're not to be underestimated", he said. The national network would be a way for the federal government to steer contracts to preferred providers and to nurture a network-equipment market that is free of Chinese influence. Huawei's deal with AT&T to sell its phones through the carrier had fallen through earlier this month.
5G is on its way whether the government backs it or not. For driverless cars, that means uninterrupted communication between a auto and other vehicles, data centers and outside sensors.
Trump recently began making good on his aggressive "America First" trade agenda, with China as a primary target by imposing steep tariffs on imported washing machines and solar panels. It also built a data center in Zambia after the nation secured a $440m loan from China. That could ultimately benefit China's own 5G development initiatives.
Details of the plans were unveiled in a memo and PowerPoint presentation created by a senior National Security Council official and reported by Axios.
"China has assembled the basic components required for winning the AI arms race", the memo states.