New Cold War? Reading the tech leaves at Munich

Are the US and China headed for a new Cold War over technology? Judging by what we heard a few days ago at the Munich Security Conference, a major trans-Atlantic gathering for world leaders and wonks, you'd certainly think so. US, European, and Chinese officials at the event all weighed in with strong words on the US campaign against Chinese 5G giant Huawei and much more. Here are the main insights we gleaned from the proceedings:


The US is getting more ideological. US officials are increasingly casting competition with China over 5G networks not just as an issue of job losses, or even of national security, but as an outright ideological struggle. Just look at the comments from House Speaker Nancy Pelosi, who warned against the "Sinification" of 5G and said that the US campaign to get allies to ban Huawei was "not about an economic advantage," but rather about "autocracy versus democracy." Taken together with similar language from Secretary of State Mike Pompeo and Secretary of Defense Mark Esper on the dangers posed by Huawei, Pelosi's remarks reflect a bi-partisan hardening of Sinophobe attitudes in Washington.

China isn't flinching. At Munich, China's foreign minister blasted what he called US "lies," and said the US just wants to suppress China's "inevitable" rise and "rejuvenation." That tough talk, couched in world historic and latter day anti-imperialist terms, comes as Beijing accelerates its push for self-sufficiency in advanced technologies like semiconductors (which it still imports largely from abroad). In response to US pressure, Huawei has started designing 5G equipment and handsets that don't rely on American hardware or software. Whether China is able to be fully self-sufficient is an open question, but Beijing's ideological commitment here is similar to Washington's.

Europe wants to go its own way. Europe is wary of China's technology ambitions, sure, but European leaders are also increasingly wary of relying on the US. French President Emmanuel Macron called for Europe to remain "sovereign" when it comes to technology, defense, and other important issues. Rather than focus exclusively on China, the EU and member states like France and Germany want to regulate Big Tech across the board and promote "European" alternatives in areas like cloud computing and Big Data regulation.

To that end, Margrethe Vestager, the EU's lead on technology and competition policy, will present the bloc's new strategy for tackling digital issues like AI, facial recognition and Big Data. Any new policies that slap extra regulations on US tech firms or try to chip away at Silicon Valley's market leadership could further roil relations with Washington.

Bottom line: With the two main contenders increasingly dug in for ideological reasons, and Europe set on charting its own course, the Tech Cold War is likely to get worse before it gets better.


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