Editor's note: Huang Yongfu is a senior fellow at the International Cooperation Center (ICC) of the National Development and Reform Commission of the People's Republic of China. The article reflects the author's opinions, and not necessarily the views of CGTN.

In an exclusive report of Reuters on October 18, it said that the Chinese technology giant Huawei has initiated early-stage talks with some interested U.S. telecom carriers to which it is considering licensing its "fifth-generation" (5G) network technology.

This follows the bold idea made by Ren Zhengfei, the founder and CEO of Huawei, in an interview with the Economist on September 10 that Huawei may sell its 5G technology to a Western firm in terms of licensing the technology (including patents, licenses, code, technical blueprints and production knowhow), which would be free to make use of the technology and develop its own products.

According to the interview with Ren, the acquirer would be allowed to modify the source code, meaning that neither Huawei nor the Chinese government would even have hypothetical control of any telecoms infrastructure built using equipment produced by the new company.

U.S.'s easing of regulatory restrictions on Huawei was not included in the first phase of the 13th China-U.S. trade talks, but it would be the key theme in the second phase.

At a time when tech decoupling between the world's two largest economies is under way, Huawei's mooted offer is an incredible move that could potentially help palliate the tech cold war, enhance competition and speed up the China-U.S. trade negotiations.

Tech decoupling between U.S. and China

By citing the "national emergency" in technology, the Trump administration is aggressively engaged in tech decoupling between the U.S. and China.

On May 16, the U.S. Commerce Department added Huawei and its affiliates to its Entity List, a trade blacklist. Since then, the U.S. government has added Chinese firms to the list for another three times, with the latest one being 28 Chinese institutes and companies including eight companies of artificial intelligence to be added on October 7.

As defense, China issued its own "unreliable entities" list targeting the U.S. companies that cuts off supplies to Chinese ones for noncommercial reasons. Huawei's 33 American suppliers would be natural candidates, including Intel, Microsoft, Oracle, and Qualcomm. Both lists will force both Chinese and American corporations to navigate in an increasingly complex minefield.

The Trump's seismic decision to enforce separation between the two superpowers also includes urging the U.S.' allies to stop using Huawei's 5G gear or equipment.

However, so far only a handful of countries were persuaded to ban Huawei. But UK, the U.S.' closest ally, is reluctant to take sides in this dispute. Like the UK, most countries will be either unwilling or unable to choose sides between America and China, and try to straddle the two superpowers.

If the divided future comes to pass, the tech world is likely to face the bifurcation into two tech ecosystems with incompatible 5G kits between U.S. and China. The roll-on consequences of tech decoupling will be an acceleration of unraveling the complex supply chains that linked China to America. A chain reaction is underway as a giant industry braces for a violent shock. 

What does Huawei's offer mean for the tech world?

When the alarm is sounding for the West that Huawei would supply the gear for most of the world’s new mobile-phone networks, its offer means a lot to the tech world.

One the one hand, Huawei's offer could help assuage the tech decoupling. As the acquirer would be free to modify the source code to address their security concerns, decisions on the purchase of telecoms equipment could then be made by pragmatic boardrooms rather than politicians.

Countries such as Australia (which has banned Huawei's gear) would no longer have to choose in-between but get access to technology in their networks that are both cutting-edge and cheap, without fears of Chinese eavesdropping.

One the other hand, Huawei's offer could enhance competition. The offer allows the West to gain safe access to cutting-edge 5G technologies, avoiding roll-out delays, and embark on a fairer technological race with China.

While accepting the risk with a major competitor in the future, Ren aims to level the playing field in which a thriving competitor will be created who could compete in 5G with Huawei. The thriving buyer, either a new Western contender or a stronger existing one, would keep its existing contracts and continue to sell its own 5G kit globally. The buyer would face no competition from Huawei in America, but fair competition with Huawei in other countries.

Although Huawei's offer might not be able to placate America's national-security apparatus, American hardliners or the like who are keen to play up the "China threat theory",  to harm the China-U.S. ties, it represents a positive effort from China's side to dispel misunderstanding and reinforce cooperation and trust between two world's largest economies.

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