Nice Guardian column by Larry Elliott in which he focusses on an interesting (and under-discussed) aspect of the Huawei controversy: why a country (the UK) that emerged from the second world war with a technological edge in computers and electronics should require the assistance of what is still classified as an emerging economy to construct a crucial piece of national infrastructure. It’s a sign, he argues, of how diminished Britain is as a manufacturing force that the only rivals to Huawei are not the great names of the past such as Marconi and Plessey, but Finland’s Nokia and Sweden’s Ericsson.
The Huawei affair should help to puncture a few myths. In the early years of China’s rapid industrialisation, the UK took comfort from the fact that it was only low-cost manufacturing that was migrating east. Developed countries like Britain, it was said, would do all the clever, high-end, profitable stuff, while the Chinese would have to be content with churning out cheap toys and clothes.
It seemed highly complacent to assume that China – a country which was making technological breakthroughs while Europe was stuck in the dark ages – would be content with being an assembly plant for western consumer goods, and so it has proved. China is now one of the world leaders in artificial intelligence and solar panels. When the government wanted to build a new nuclear power station at Hinkley Point, the Chinese got the contract.
A second myth that China has well and truly busted is that all will be well provided market forces are not hampered by state interference. China has had an industrial strategy over many decades, and has stuck to it, while during the same period Britain has seen the state’s role wane and manufacturing become an ever smaller part of the economy.
Britain’s mid-20th century edge in computing, jet engines and radar was a direct consequence of putting the economy on a war footing between 1939 and 1945. What’s more, the reason the UK retains a global presence in aerospace and pharmaceuticals is that companies have been able to rely on the state – in the form of the Ministry of Defence and the NHS – being an important customer.
Interestingly, Huawei is now trying to persuade the residents of Sawston — a village just down the road from me — that they should be relaxed about the company’s plans to build a new factory on its outskirts.