A Digital Trade Policy for a Digital Economy

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By James Lockett, Vice-President, Huawei Technologies

Openness and competition are the cornerstones of market economies. Huawei has always believed that these free trade values, along with cooperation, are the underlying drivers of growth and development. Of course, they have to be applied in an orderly way, and so, as a global company, we are very conscientious about supporting and complying with global trade rules.

Huawei has succeeded globally by being open and competitive, and by maintaining close relationships with public institutions, as well as collaborating appropriately with our customers, suppliers and rivals in the marketplace. Our success is also due to the company investing heavily in R&D, giving us a unique and collaborative commitment to innovation. We believe that free trade and innovation go hand in hand, one fostering the other.

Our approach is to build, wherever possible, a harmonious business environment where innovation can thrive – a win-win industry value chain through open cooperation. Indeed, by adhering to the principles of openness and cooperation, we are able to develop industry chain resources with our peers and carry out cross-domain collaboration on various levels with partners in a range of regions and industries.

To understand Huawei’s perspective on free trade and innovation we have to go back to its humble beginnings – a company founded a little over 25 years ago. Founder Ren Zhengfei says this happened «quite by chance», when he lost his job as the Chinese military was streamlined. No longer able to work for a state-owned enterprise, Ren started his own business under fairly unfavourable circumstances in China at that time, with lots of competition from well-funded foreign companies.

«The biggest issue I faced was a lack of knowledge about how the market economy worked», he explained in 2015 at a Davos Summit. «Finding it difficult to mesh fully with mainstream society, I worked on the periphery of the market. Those who could not do a good job would be held accountable for it, and I still had to learn what I needed to know about a manager’s responsibilities.»

So, effectively, Huawei began life with no resources, no background and no secrets. In 25 years it has grown into the world’s leading information and communication technologies (ICT) solution provider, thanks to spectacular growth in recent years. Only by working hard has the company developed opportunities. Our one goal is to serve our customers. Our global development depends upon us integrating openly with the world.

Europe, Huawei’s second home

This is how Huawei grew to be a global ICT leader. Today we operate in over 170 countries across the globe, and have built successful partnerships with 45 of the world’s top 50 telecoms operators, around half of which are European. Indeed, Huawei considers Europe as its second home market. We provide high-quality customised services and solutions to serve European customers better, and to reinforce our core value of being a customer-centric company. As a local partner, we are in Europe for the long run.

As a result, we have moved a substantial part of our global value chain to Europe. With some 9.900 employees in the region, of whom 1.200 are working in R&D, local talent makes up every link of this value chain. These deep local connections enable Huawei not only to understand and meet the needs of our customers, but also to contribute to our global offering, integrating European resources and capabilities. This has meant a boost to smart growth for the region.

For these reasons, Huawei is in a unique position to support Europe and China’s ambitious plans for their common future. Huawei continues to work hard to foster dialogue between all actors of the Eu-China partnership, while helping to make the voice of the European ICT research and business community heard in China.

Thriving in the context of free trade and fair competition, Huawei has thus become a driving force of European innovation, thanks to having made Europe its global competence centre. We run 18 R&D sites in Europe, located in eight countries (Belgium, Finland, France, Germany, Ireland, Italy, Sweden and the Uk), and operate numerous joint innovation centres in partnership with telecom and ICT partners. In May 2015, we established the Huawei European Research Institute (ERI) in Leuven, Belgium, to manage this growing array of research facilities and strengthen our win-win partnership with European industry.

The company also set up the ERI in Leuven to support the European Union in implementing its 2020 Digital Agenda, which seeks to exploit the potential of ICT to power economic growth. Huawei’s core objectives and activities, as well as the European focus of our R&D investment strategy, dovetail with the priorities of the EU’s Digital Agenda for Europe. We are using ICT to deliver smart, sustainable and inclusive growth, teaming up with European partners to develop telecom networks and solutions, invest in underdeveloped regions and support ICT education.

5G research

One of the biggest areas Europe and China are exploring together is the next generation of mobile communications (5G), ultra-fast wireless networks that are due to be introduced in the next decade. Huawei is at the forefront of initiatives to drive 5G technologies forward, and has already taken concrete steps towards delivering a global, market-ready 5G standard by 2020.

In Europe, the company is working with industry leaders, consortia, universities and innovation platforms, as well as participating in EU 5G research projects, including the Metis consortium and the 5G PPP (Public-Private Partnership). It is also researching 5G technologies at Surrey University’s 5G Innovation Centre (5GIC) in the UK, where it will be investing £5 million as part of the $600 million it is committing to 5g research globally by 2018. Huawei is also building a large-scale 5G test-bed in Munich, Germany, with the Bavarian State Government, the City of Munich, Technische Universität München (TUM) and M-Net, which will enable researchers to conduct 5g trials in a real-world environment.

At the Chinese level, Huawei played a major role in the push to open R&D funding in China to companies and researchers from other countries. The adoption of the 863 Programme was a direct result of these efforts.

Indeed, over the past few years, Huawei has been promoting dialogue between China and Europe in many ICT areas, including cloud computing, the Internet of Things and standardisation efforts. With the 40th anniversary of EU China relations providing momentum to deepen bilateral engagement, Huawei is committed to further stepping up efforts to deliver win-win results by helping to strengthen strategic dialogue, and by using its expertise as an innovator with a global perspective to bring joint projects to fruition. Much remains to be done, however, and by actively engaging with Eu policymakers, industry, research partners and civil society, Huawei hopes to contribute to shaping the right policy framework to achieve digital targets.

Many people in the EU still lack adequate access to high-speed internet, for instance. Europe also needs to start preparing for 5G on the ground – the move towards ultra-fast connectivity is a pre-requisite for keeping Europe competitive and offers a myriad of new applications. Upgrading Europe’s broadband networks will be the key to bridging the ‘digital divide’ and ensuring that Europe reaps the full benefits of the ICT revolution.

Cloud computing

Cloud services are another area reshaping the way in which we work, share, connect and conduct business. The immense computing power they make available to users – from individuals and small businesses, to large companies and governments – involves more and better online services available to more users at a lower cost. With this wealth of new opportunities for Europe comes the need to create the right environment in which to seize them and to help this technology grow to its full potential.

At Huawei, we believe that regulation, technological collaboration and the definition of common international standards will be instrumental in making full use of this revolutionary technology. We are working to address the concerns that prevent many potential users from embracing the cloud. Data protection, data security, data portability and interoperability are key.

Overcoming these challenges requires close collaboration and efficient alignment between policymakers and industry actors. Huawei is contributing to this process by engaging in an open dialogue with decision-makers, but also by providing the building blocks for cloud infrastructure. We are supportive of trade agreements at multilateral, regional and bilateral levels to provide ongoing frameworks for open competitive services in this rapidly evolving arena.

Internet of Things

The Internet of Things (IoT) enables multiple forms of communication – machine-to-machine, machine-toman, man-to-machine (M2M). Considered the next big It wave following computers, the internet and mobile communications, M2M makes the idea of a ‘smart planet’ a reality.

Enabling ubiquitous smart connectivity involves not just technological innovation, but also a framework to ensure the security and privacy of users. The Eu has made the Internet of Things a priority in its Digital Agenda for Europe. A wide range of EU-funded projects have been set up to secure deployment of the Internet of Things in Europe and to develop appropriate standards. Huawei is determined to play its part in this development.

At Huawei, we are eager to provide all the help we can to support the IoT in and for Europe, including by speeding up progress toward 5G, which could connect 100 billion devices as early as 2020, providing a truly immersive experience.

Together with our European partners, we are working on exciting applications designed to make life in the cities of tomorrow easier, greener and cheaper. At an innovation lab run by Imperial College London and Huawei, we are looking into ways of harnessing big data for applications including energy and healthcare.

Advancing global standards and respecting IPR

As the globally accepted GSM standard for mobile telephony developed in Europe illustrates, effective standards are vital for the development and successful deployment of technology. Given that the Eu and China are two of the world’s leading markets for ICT, it follows logically that both should work closely together in setting common standards.

Intellectual Property Rights (IPR) are also a key component of free trade and innovation. Huawei greatly respects the IPR of industry partners, and also attaches great importance to developing and protecting our own IPRs. The number of European patent applications filed by Huawei increased in 2014 at a faster rate than ever, reaching 1.600. Rising to the 7th largest patent-holder in Europe in 2014, from 13th in 2013, Huawei had 493 patents granted by the European Patent Office, reflecting the company’s innovation competence. This is the highest position a Chinese company has ever reached in the rankings.

While working hard to innovate, and remaining vigilant over IPR, the importance of openness in a free trading world cannot be over-emphasised. We need to remain open-minded if we are to integrate fully with the world, jointly contributing to the information society revolution, for only then can we have a bright future.

In conclusion, Huawei firmly backs the international trade rules that allow today’s commerce to move across borders. We have supported the two most recent agreements advancing such trade, namely the WTO’s Trade Facilitation Agreement and the Information Technology Agreement, both of which reduce trade barriers for ICT goods. We support developing synergistic rules that address today’s trade issues, which revolve around regional and global value chains, and around complex transactions involving goods, services and Ip delivered in multiple ways.

We must move forward with creative rule-making ideas which encourage rather than stifle ICT deployment. Today’s world cannot afford to be slowed by analogue rules for a digital economy. Digital rules need to provide guidance to a digital economy that changes every 1-3 years presently and faces accelerated change. Huawei will join with its ICT industry colleagues in promoting such rules for the benefit of our customers and our society.

This article was originally published on the print edition of The New European #6. You can read it here. 

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Welcome to The New European, the online magazine of UNITEE, the New European Business Confederation, dedicated to highlighting the great contributions New Europeans bring to our societies.

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