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U.S. manufacturing in need of strategy

Oct 18, 2012

From Mr Kent Hughes.

Sir, In his article “It is too late for America to eliminate Huawei” (October 11), John Gapper argues that it is time to open the US market to Chinese telecommunications equipment companies Huawei and ZTE. He continues by saying that “the time to declare telecoms a strategic, protected industry ... was 20 years ago”, largely dismissing the concerns of a recent report by the House Intelligence Committee. Mr Gapper does not deny that violations of intellectual property rights or Chinese subsidies might have played a role in Huawei’s success but argues that these are trade disputes rather than intelligence matters. He points to the UK’s approach of vetting Huawei equipment before it is installed and notes that the US could require listing on a recognised exchange to increase corporate transparency.

What he does not explore is the question of why telecoms was not designated as a strategic industry. Nor does he explore how and why US companies fell behind the international competition. Telecoms is not the only instance in which a technology developed in the US has gradually lost its lead to international competition. It has happened in flat panel displays, light emitting diodes, batteries and a host of other technologies.

Among the industrial and emerging market powers, the US alone lacks growth, innovation and manufacturing strategies. The US has chosen to play by different rules and seeks comfort in the view that the market will make the right choices, simply ignoring the impact of the strategies of our international competitors. Until that changes, we run the risk of more and more instances of key industries suffering a gradual decline or leaving our shores all together.

Our fate, dear America, lies not in the stars but in our manufacturing strategy.

Kent Hughes, Director, Program on America and the Global Economy, Wilson Center, Washington, DC, US

This article was originally printed in the October 18, 2012 edition of the Financial Times

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