One small step for Huawei, one giant leap for China

As is often the case, the seemingly trivial turns out to be a giant event. I suspect this is the case with Huawei's announcement, buried in the back pages of financial newspapers that it would no longer pursue new business in Iran. So what , you might ask.  Read on.

One of the fundamental principles in China is the total separation of politics  & economics. It has one of the freest of capitalist systems (at least for Chinese) and one of the most controlled of political systems. In foreign affairs, China has diligently pursued a policy of complete non interference in political matters. Its policy in Africa is unique in history. It is rapidly colonising economically, but scrupulously keeping away from interference in local politics. It will do business with anybody - God, Archangel Gabriel, Satan, Devil whoever, as long as there is business to be done. Before you denounce it, consider that there is some merit in this approach - the Chinese say political matters are for the citizens of that country to decide and it is not their place to make value judgements on them. In this, they are completely different from the European colonisers of the past.

The first chink I have come across in this policy is this announcement from Huawei. Huawei is a large supplier of telecoms equipment to Iran. These are undoubtedly used for espionage and suppression. Iran is a pariah for many nations - no American company can deal there. There has been constant criticism in the West of Chinese companies who do business there, but that's not unusual  - they are often criticised for doing business with the likes of Mugabe. So why has Huawei taken this clearly political step. Before you think that this is one company deciding and not China - perish the thought. No company in China decides on any sensitive matter without the go ahead from the government. For the first time, atleast as far as I know, China is saying politics might dictate economics in foreign affairs.

Is it finally true that economic clout cannot be divorced completely from politics.  As China's economic power grows bigger and bigger in the countries it is doing business with, it becomes harder and harder to stand aside and say it is not involved with local politics. This is exactly what happened to the East India Company, which started in exactly the same way. Maybe China is reaching the inflexion point. One breach like the Huawei action and the dam has to burst. Can the Chinese now deal with blood diamonds in the Congo, or keep away from selling arms to Mugabe, for very long ? As it gets drawn more and more into global politics, it will have profound implications for the world and China. The world because, it will alter the balance of political power inexorably. And for China because it is not good at doing this - diplomacy is not its strong point and it will have to learn.

That's why I think, its one small step for Huawei ..........