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U.S. needs to have more allies to bypass Huawei

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Michael Chertoff is co-founder of consulting firm Chertoff Group and formerly served as the Secretary of the Department of Homeland Security. Mike McConnell is vice chairman of Booz Allen Hamilton and formerly served as director of the National Security Agency.

On Wednesday, the FCC opened additional mid-band spectrum to support 5G mobile communications in the U.S., reducing reliance on short-range microwave spectrum that comes with high deployment costs. This move will help to ensure the U.S. doesn’t fall further behind other countries in the adoption of 5G, which is expected to spark $12 trillion in new economic activity by 2035, especially in enabling the internet of things.

Perhaps more importantly, this proposal demonstrates one way the U.S. can reinforce elements of what the government calls the “national technology and industrial base” (NTIB), the collection of companies who design, build and supply the U.S. with vital national-security related technologies. These technologies, which now include 5G wireless networks, increasingly underpin everything from the financial sector to the supply chains that deliver our food.

Government support for portions of the NTIB is nothing new. World War II prompted the government to foster the “defense industrial base,” ensuring that American forces had the tanks, aircraft and ships needed to win the war. The Defense Production Act formalized this system at the dawn of the Cold War, granting the President broad authorities to ensure a reliable, domestic supply of vital national security goods. While some defense goods have collateral, non-military uses, others, such as tanks and fighter jets, do not. When the military is the only customer for a good it must place regular orders, or offer other forms of support, in order to guarantee its continued supply.

Yet this system’s limitations are beginning to show. The rapid technological rise of China, and its intellectual property theft, have eroded America’s advantages, while globalization has made it prohibitively expensive to manufacture certain technologies in the U.S. For example, the government’s secure computer chip program has long faced challenges that have severely limited the number of trusted suppliers, driven up costs, and limited the availability of U.S.-made versions of some chips.

Similarly, the economies of scale required to bring advanced technologies to market limit the number of companies that can compete in any given segment. For example, while U.S. vendors still exist, just four companies — Ericsson, Nokia, Huawei and ZTE — account for two-thirds of the global telecommunications equipment market. Some market segments, such as 5G base stations, have no U.S. competitors. Worse, China’s Huawei focuses on low and mid-band base stations that increase their range and reduce costs, making them appealing to much of the world.

As such, we must reexamine how we think about the NTIB, expanding its scope beyond DoD and military operations technologies, and better leverage it to protect our cyber industrial base. Our entire society, not just the military, has become highly technologically dependent. Citizens rely on the same GPS systems, 5G base stations and cloud server technologies used by the military. These technologies power Netflix, the electrical grid, Waze, nuclear submarines and the global financial system. Such dual-use technologies are just as, if not more, important to our national security as any tank, aircraft or ship.

In this environment we must bolster our ability to protect the cyber industrial base of the U.S. and our allies. Fortunately, some pieces for such a move are already in place. Congress has already allowed the Defense Production Act to include dual-use technologies and for coordination with Canada, the U.K., and Australia on securing and protecting our shared industrial bases. However, we must do more.

First, support for our cyber industrial base must grow — the government must take an active role in the roll-out of vital technologies.

In the case of 5G, the U.S. should follow the lead of other countries, freeing vital spectrum and easing the deployment of new base stations. The U.S. must also go further to support key suppliers, either American or allied. In some instances this may require the U.S. government to purchase a certain volume of a technology to ensure the viability of the supplier, as the military does today for naval vessels, or for the government to invest in a key factory, as the Army has at the Joint Systems Manufacturing Center in Ohio.

Second, we must expand our cooperation beyond four allies. Key technology companies, such as Ericsson, Samsung, Nokia and Siemens, are based in other allied countries, such as Sweden, South Korea, Finland and Germany. The U.S. can benefit greatly from enhanced coordination with its allies, leveraging their innovations to address our own technological and manufacturing gaps. Coordination can come in varying forms, including multi-lateral purchase arrangements, like those for the F-35, or by purchasing 5G technologies from Sweden’s Ericsson rather than China’s Huawei.

Now is the time for the U.S. to expand its work to safeguard and grow our cyber industrial base. In an environment of rapid technological change and globalization it is imperative that we take the actions necessary to ensure we continue to have access to secure forms of the advanced technologies that underlie both our economy and military. Without such action we could end up with little choice but to buy from the likes of Huawei — and be forced to accept the security risks that come with it.

Follow @CNBCtech on Twitter for the latest tech industry news.

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U.S. likely impose sanctions against China over Hong Kong law

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Hong Kong Chief Executive Carrie Lam attends the opening session of the National People’s Congress (NPC) at the Great Hall of the People in Beijing on May 22, 2020.

Leo Ramirez | AFP | Getty Images

The U.S. government will likely impose sanctions on China if Beijing implements national security laws that would give it greater control over autonomous Hong Kong, White House National Security Advisor Robert O’Brien said Sunday. 

The draft legislation represents a takeover of Hong Kong, O’Brien said, and as a consequence U.S. Secretary of State Mike Pompeo would likely be unable to certify that the city maintains a “high degree” of autonomy. This would result in the imposition of sanctions against China under the Hong Kong Human Rights and Democracy Act of 2019, O’Brien said.  

Pompeo has already called the proposal a “death knell” for Hong Kong’s autonomy. O’Brien warned that Hong Kong could lose its status as a major hub for global finance. 

“It’s hard to see how Hong Kong could remain the Asian financial center that it’s become if China takes over,” O’Brien told NBC’s Chuck Todd on “Meet the Press.” He said financial services initially came to Hong Kong because of the rule of law that protected free enterprise and a capitalist system.

“If all those things go away, I’m not sure how the financial community can stay there. …They’re not going to stay in Hong Kong to be dominated by the People’s Republic of China, the communist party.” 

The legislation was announced during the annual session of China’s parliament, the National People’s Congress. The session had been delayed for months during the coronavirus pandemic. Hong Kong faced months of at times violent anti-government protests before the pandemic effectively shut China down.  

Hong Kong has been governed under the “one country, two systems” principle since the former British colony was returned to Chinese rule in 1997. The system gives Hong Kong a high degree of autonomy and a greater degree of freedom for the special administrative region than the rest of China. 

A draft decision on “establishing and improving the legal system and enforcement mechanisms” for Hong Kong was submitted to China’s parliament Friday, according to state news agency Xinhua. A document explaining the decision said the one-country two systems principle “has achieved unprecedented success in Hong Kong,” but the “increasingly notable national security risks” in the city “have become a prominent problem,” according to Xinhua.  

The document says activities “have seriously challenged the bottom line of the ‘one country, two systems’ principle, harmed the rule of law, and threatened national sovereignty, security and development interests,” according to Xinhua.

The move from China has incited strong opposition from pro-democracy activists and politicians. Thousands of protesters demonstrated for the first time since the introduction of the national security laws on Sunday. Hong Kong police fired tear gas and pepper spray to disperse the crowd.

Nearly 200 political figures from the U.K., Europe, Australia, North America and Asia condemned the laws in a joint statement. 

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Airlines change summer air travel procedures

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Ahead of the Memorial Day holiday weekend, all states in the U.S. began to lift some restrictions implemented to halt the spread of the coronavirus. Government officials are still urging people to practice social distancing and to wear masks in public. 

Changing opinions from scientists and health officials have contributed to some people refusing to wear masks because public health authorities initially advised against wearing masks, saying there was little evidence that it would help prevent people from getting sick.

China’s top diplomat criticized U.S. efforts to hold China accountable for its alleged role in the spread of the coronavirus, calling any aims to force Beijing to pay compensation for the coronavirus a “daydream.”

The number of coronavirus fatalities in New York state fell below 100, Gov. Andrew Cuomo said on Saturday, marking the lowest daily death toll since March 24.

This is CNBC’s live blog covering all the latest news on the coronavirus outbreak. This blog will be updated throughout the day as the news breaks. 

  • Global cases: More than 5.33 million
  • Global deaths: At least 341,513
  • U.S. cases: More than 1.62 million
  • U.S. deaths: At least 96,046

The data above was compiled by Johns Hopkins University.

Air travel is going to look different this summer because of the coronavirus

9:03 a.m. ET — Memorial Day weekend is the traditional kickoff to the peak travel season and while demand is showing some signs of life, it is still down about 90% from a year ago. The virus and concerns about it spreading have prompted new procedures at airlines and federal agencies.

The Department of Homeland Security, which includes TSA and customs, is exploring temperature checks at airports. The Transportation Security Administration is also changing some polices to limit physical contact, such as asking travelers to scan their own boarding passes and that they remove food and other items from their bags so officers don’t have to touch bins.

Starting this month, U.S. airlines require that travelers wear masks on board. They are tweaking boarding to fill seats from back to front to limit contact with other travelers. Some airlines are limiting the number of travelers on board, or letting travelers know when their flights are full. Experts warn its nearly impossible to socially distance on an aircraft, however. —Leslie Josephs

AngloGold Ashanti closes mine in South Africa after 53 employees tested positive

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China tells U.S. to stop wasting time in coronavirus battle

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Pedestrians wearing protective masks walk along the street as a screen displaying a live broadcast of Chinese President Xi Jinping at the National People’s Congress in Beijing, China, on Friday, May 22, 2020.

Bloomberg

The United States should stop wasting time in its fight against the coronavirus and work with China to combat it, rather than spreading lies and attacking the country, the Chinese government’s top diplomat Wang Yi said on Sunday.

Sino-U.S. ties have nosedived since the outbreak of the new coronavirus, with the administrations of President Donald Trump and President Xi Jinping repeatedly trading barbs over issues related to the pandemic, especially U.S. accusations of cover-ups and lack of transparency.

The two top economies have also clashed over Hong Kong, human rights, trade and U.S. support for Chinese-claimed Taiwan.

State Councillor Wang, speaking at his annual news conference on the sidelines of China’s parliament, expressed his deep sympathies to the United States for the pandemic, where the death toll is expected to surpass 100,000 in the coming days, the highest number of any country.

“Regretfully, in addition to the raging coronavirus, a political virus is also spreading in the United States. This political virus is using every opportunity to attack and smear China,” said Wang, who is also China’s foreign minister.

“Some politicians have ignored the most basic facts and concocted too many lies about China and plotted too many conspiracies,” he added.

“I want to say here: Don’t waste precious time any longer, and don’t ignore lives,” Wang said.

“What China and the United States need to do the most is to first learn from each other and share their experience in fighting against the epidemic, and help each country fight it.”

China and the United States also need to start coordinating macro policies for their respective economies as well as the world economy, he added.

China remains prepared to work with the United States in the spirit of cooperation and mutual respect, Wang said, when asked if Sino-U.S. relations would further worsen.

“China has always advocated that, as the world’s largest developing country and the largest developed country, both of us bear a major responsibility for world peace and development,” he said. “China and the United States stand to gain from cooperation, and lose from confrontation.”

‘Indiscriminate litigation’

Last month, Missouri became the first U.S. state to sue the Chinese government over its handling of the coronavirus, saying China’s response to the outbreak that originated in the city of Wuhan brought devastating economic losses to the state.

Wang said such lawsuits lacked any legal basis. “The China of today is not the China of a century ago, and nor is the world,” he added.

“If you want to infringe upon China’s sovereignty and dignity with indiscriminate litigation, and extort the fruits of the hard work of the Chinese people, I am afraid this is a daydream and you’ll only humiliate yourself.”

Wang also offered his strong support for the World Health Organization (WHO) and its chief, Tedros Adhanom Ghebreyesus, frequent targets of U.S criticism.

“To support the WHO is to support saving lives. This is the choice any country with a conscience should make,” he said.

Trump, who has accused the agency of being “China centric”, has threatened to permanently halt funding to the WHO and to reconsider his country’s membership of the agency.

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