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THREAD Failure to address Moscow& #39;s growing dependency on @Huawei will help Beijing embed Russia in a China-centred technological order, a digital #PaxSinica with worrying, global ramifications, I argue in my new piece for @FT. Here is why 
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten"> 1/ #comments-anchor">https://www.ft.com/content/f36a558f-4e4d-4c00-8252-d8c4be45bde4 #comments-anchor">https://www.ft.com/content/f...
2/ As US-led pressure campaign against @Huawei starts to bear fruit, and now @10DowningStreet even contemplates an alliance of democracies to provide developing countries with alternatives to Huawei in 5G, this effort overlooks one key battleground: Russia https://www.thetimes.co.uk/article/downing-street-plans-new-5g-club-of-democracies-bfnd5wj57">https://www.thetimes.co.uk/article/d...
3/ If @Huawei succeeds in establishing control over https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> 5G buildout, that will strengthen https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> position in the battle for other EMs. Influence of example is key. If proud and technologically sophisticated Russia believes that Huawei is safe, why should Brazil or South Africa resist?
4/ Why is @Huawei well positioned to dominate https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland">5G? There are at least 4 factors. Factor №1: money. Huawei provides great technology, but cheaper than Western competitors due to https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> government subsidies, as @YapCW documents in this @WSJ piece https://www.wsj.com/articles/state-support-helped-fuel-huaweis-global-rise-11577280736">https://www.wsj.com/articles/...
5/ @Huawei has a well-established presence in https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> 3G market. For many years the big 3 local cell phone operators, especially @megafonru, have been used to and relied on https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> equipment (Huawei + @ZTEPress) alongside hardware supplied by @nokia & @ericsson.
6/ Factor №2: national security considerations. The https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> debate on @Huawe is very different from the one in the West. The Kremlin knows well that Russia is unlikely to produce its own 5G hardware any time soon, and waiting for @RostecRussia may delay 5G rollout for years
7/ Local cell phone operators believe that @RostecRussia will not be able to deliver on its promises till 2024, and the working group under @GovernmentRF has recently quietly supported this view by removing a demand to use only https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland">-made hardware for 5G https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten"> https://twitter.com/AlexGabuev/status/1273517099126861827?s=20">https://twitter.com/AlexGabue...
8/ That leaves the Kremlin with an unpleasant option to rely on foreign hardware. The dilemma was once explained to me by a high-level https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland">official: "We are either bugged by @NSAgov or https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China">MSS, so we need to chose a lesser evil. https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇺🇸" title="Flagge der Vereinigten Staaten" aria-label="Emoji: Flagge der Vereinigten Staaten"> sanctions us, https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> helps us, so the choice is obvious"
9/ Besides intel collection through backdoors in 5G hardware, https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> security state is paranoid about the "killer switch." @DeptofDefense might force western vendors to knock out https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland">5G networks, the theory goes, potentially unleashing political&economic chaos leading to regime change
10/ China is the lesser evil again, as no one in the Kremlin loses sleep worrying that Beijing might try to topple Vladimir Putin. This @FT piece by @maxseddon & @HenryJFoy is a must-read to understand https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> concept of "sovereign Internet" https://www.ft.com/content/93be9242-85e0-11e9-a028-86cea8523dc2">https://www.ft.com/content/9...
11/ Factor №3: Huawei& #39;s sophisticated GR strategy in Russia, as the Chines company has a high-caliber team working on the issue led by senior vice-president Lin Ruiqi 林睿琦, former head of @Huawei Moscow office and a fluent Russian speaker
12/ @Huawei has been active in building relationships with Russian research institutions, and has portrayed this effort as support for @GovernmentRF& #39;s priorities to diversify https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> economy and prevent brain drain. Good explainer by @DimitriASimes in @NAR https://asia.nikkei.com/Business/China-tech/Huawei-finds-allies-in-Russia-as-Kremlin-cuts-reliance-on-West2">https://asia.nikkei.com/Business/...
13/ At the same time, recruitment of https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> scientists (mathematicians, algorithms pros etc.) is in line with @Huawei& #39;s strategy to integrate non-Western talent in order to offset https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇺🇸" title="Flagge der Vereinigten Staaten" aria-label="Emoji: Flagge der Vereinigten Staaten"> pressure. See this very well-researched piece by @FT& #39;s @YuanfenYang https://www.ft.com/content/c6993200-1ff3-11ea-b8a1-584213ee7b2b">https://www.ft.com/content/c...
14/ A crucial GR victory for @Huawei, however, has happened in March, and caught surprisingly little attention in Western capitals and Moscow alike (the news cycle was already dominated by COVID). https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> company has entered a strategic partnership with @sberbank on cloud business
15/ The most comprehensive story on this was done by @kommersant. @Huawei dropped a $30m investment that would have marketed cloud solutions under its own brand in Russia, and became the backbone of SberCloud offering instead https://www.kommersant.ru/doc/4275431 ">https://www.kommersant.ru/doc/42754...
16/ By doing so, @Huawei has cunningly exploited @USTreasury sanctions against @Sberbank that have discouraged US tech giants like @Azure & @awscloud from partnering with it, particularly since both are locked in a legal battle over giant Pentagon project https://www.businessinsider.com/pentagon-reconsider-jedi-microsoft-amazon-web-services-2020-3">https://www.businessinsider.com/pentagon-...
17/ Ability to hitch its wagon to @sberbank’s client base and the influence of CEO Herman Gref, a longtime Putin confidant, is invaluable for @Huawei. In order to understand the role of Sberbank for https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> tech sector, this piece by @maxseddon is still a must https://www.ft.com/content/3450c840-c0a4-11e8-95b1-d36dfef1b89a">https://www.ft.com/content/3...
18/ Factor №4: impact of COVID-19. The pandemic has sharpened Kremlin interest in https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> digital surveillance as a tool of political control, and @Huawei products such as Safe City (平安城市) have impressed the https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland">security establishment. #39;s%20first%20modern,the%20country& #39;s%20capital%20city%2C%20Nairobi">https://www.huawei.com/uk/industry-insights/technology/digital-transformation/video/video-surveillance-as-the-foundation-of-safe-city-in-kenya#:~:text=Huawei%20built%20Africa& #39;s%20first%20modern,the%20country& #39;s%20capital%20city%2C%20Nairobi.">https://www.huawei.com/uk/indust...
19/ With all of these factors combined, at least for now @Huawei looks like on its way to dominate https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> 5G, and thus bring Beijing one step closer to embedding Russia in a China-centered tech&digital order, a #PaxSinica
20/ Given the importance of Russia& #39;s example for other developing markets on 5G for reasons discussed above, as well as even more important issue of Russia becoming China& #39;s obedient junior partner, what are the options available to the West to address this important challenge?
21/ So far, there is a lot of magical thinking. The Kremlin, it is hoped, will see dangers of partnering with China/Huawei, and will disengage. @AmbJohnBolton tried this line on https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> interlocutors several times as he worked for @realDonaldTrump.
22/ There is also @EmmanuelMacron& #39;s hope that “https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> hegemony is not compatible with https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> sense of pride,” expressed in @TheEconomist interview. However, the Kremlin will not abandon @Huawei, as stable ties to https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> are a must even if someone like @navalny is in the @KremlinRussia_E
23/ What the West can realistically do, in my view, is exploit desire of private companies like @VympelCom or @ru_mts and parts of the state to hedge their bets and prevent total https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> dominance in https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland">5G. The way to do so is to help EU/US companies like @nokia, @ericsson, @Cisco etc.
24/ These companies have a positive history in https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland">, and in ideal scenario Moscow would like to combine hardware from Western&https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇨🇳" title="Flagge von China" aria-label="Emoji: Flagge von China"> vendors, and rely on national IT (esp. algorithms). One potential risk that https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> officials mention is potential widening of US/EU sanctions to include 5G.
25/ The story on https://abs.twimg.com/emoji/v2/... draggable="false" alt="🇷🇺" title="Flagge von Russland" aria-label="Emoji: Flagge von Russland"> mind is deactivation of Austrian compressors for @Gazprom via satellite last October. Something similar, the theory goes, can potentially happen to 5G hardware as result of future sanctions (a worse case scenario, of course) https://uawire.org/austrian-company-deactivates-gazprom-s-compressors-via-satellite">https://uawire.org/austrian-...
26/ A nimble Western approach will require a more honest conversation about the collateral damage from US-EU sanctions, and the incentives they create for Sino-Russian co-operation. A good start can be found in this work by @JarrettBlanc & @andrewsweiss https://carnegieendowment.org/2019/04/03/u.s.-sanctions-on-russia-congress-should-go-back-to-fundamentals-pub-78755">https://carnegieendowment.org/2019/04/0...
27/ Of course, the conversation should be not about abandoning principles and dropping existing sanctions in order to plant mythical wedges between Moscow and Beijing. It should be about calibration of use of existing sanctions, and strategic approach to this tool going forward.
28/ Today& #39;s @FT op-ed is part of broader @CarnegieEndow research project on #PaxSinica. A detailed case study on @Huawei presence in Russia is on its way, and you can follow our analysis of this important topic on the project& #39;s webpage https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten"> https://carnegie.ru/specialprojects/paxsinica/?lang=en">https://carnegie.ru/specialpr...
