A new report from the U.S.-based Information Technology and Innovation Foundation attacks unfair practices by China in bolstering China-based telecom equipment companies Huawei and ZTE at the expense of other companies.
Criticism of China’s practices in promoting its own industries have surfaced before within the Trump administration but also across a broad array of U.S.-based companies and others. ITIF called China’s government policies “distortive” and “a drag on global innovation.”
Because of the Chinese government’s practices other telecom equipment producers have innovated at a slower pace with telecom service customers around the world ultimately paying the price, ITIF said.
“Without unfair innovation mercantilist policies and programs, China would lack a globally competitive telecom industry and more innovative foreign companies would be larger and even more innovative,” ITIF President Robert Atkinson said in a statement. He also authored the report.
The report estimates that if Ericsson and Nokia, the number two and three players in telecom equipment behind Huawei, took all Huawei and ZTE sales, there would be 20% more global telecom equipment R&D and 75% more essential 5G patents.
Atkinson called on democratic, market-based nations to buy non-Chinese telecom gear. “This will send a clear message to China that going forward, systemic innovation mercantilism that hinders technology innovation will no longer be tolerated,” he said.
Huawei and ZTE could not be immediately reached for comment.