Experts Warn China May Be Winning the 5G and 6G Wars

The U.S. is in a “very precarious” position, said Daniel Gonzales, professor of technology analysis at the Pardee Rand Graduate School. The U.S. and its allies rely on two major equipment makers, Ericsson and Nokia, and neither is doing well financially, he said. Both reported losses in two of the last four quarters and Nokia reportedly is looking to sell its wireless division, which makes 5G products, he said. No U.S. companies appear in the running for Nokia's assets, Gonzales added.

China has long subsidized Huawei and ZTE, Gonzales said. “It’s no longer a free market, so to speak, in 5G,” he said. These subsidies “provide a significant advantage to China in potentially dominating 5G and 6G.” The U.S. has a stronger position in the microelectronics supply chain and U.S. companies still probably make the best modems in the world, he said. As we proceed to 6G “we have to see how that’s going to unfold.”

Huawei can make 5G modems and is building up its semiconductor factories, Gonzales said. Even with U.S. sanctions, Huawei is trying “to be competitive in advanced logic and modems.” How well Huawei is doing is debatable, he said. “They’re trying to compete across the entire 5G ecosystem.”

Chinese subsidies are a “big advantage” for Huawei, Gonzales said. The U.S. government is now supporting research on open radio access networks, but its investments are much smaller than Chinese expenditures, he said. “These are big asymmetries that are very worrisome to me.”

China is competing for global 5G leadership by promoting spectrum bands that “work with Chinese equipment and allow it to set global spectrum standards,” said David Shullman, senior director at the China Hub. This is part of China’s drive “to dominate emerging technologies and set digital norms and standards by expanding its telecommunications infrastructure.”

The FCC should “accelerate spectrum band studies to locate viable options to allocate spectrum in the mid-band range for commercial 5G,” the China Hub report says. It calls for increasing investment in 5G and related technologies “such as dynamic spectrum sharing and standalone network technologies.” In addition, it says the U.S. should fully fund the Secure and Trusted Communications Networks Reimbursement Program to remove Huawei and ZTE components from wireless networks.

In addition, the study urges U.S. policymakers to “protect against China’s 5G influence at home and abroad” by countering China’s “influence in key countries by sharing information with other countries regarding the risks of Chinese equipment such as cybersecurity and foreign influence concerns.” It also calls for the U.S. to focus on China’s “market-distorting practices, intellectual property theft, and overcapacity issues.” The U.S., it says, must lead in harmonizing bands for 5G and in “partnerships with key regions, especially in the Global South, based on shared values and objectives.”

Assessing who leads in 5G isn’t easy, said Ngor Luong, nonresident fellow at the China Hub and author of the report. “When we’re talking about technology we’re talking about really complex and long-term monitoring of technological progression,” she said. The U.S., Luong said, led in 3G and 4G, but is struggling to maintain 5G leadership.

China has “been playing catch up” but has “really emerged as a key player in the global 5G ecosystem,” Luong said. The U.S. has advantages it can “leverage” without having to “emulate the Chinese playbook.” Luong noted the importance of providing carriers with the spectrum needed to expand networks, particularly mid-band frequencies.

The U.S. has “a long way to go” on ripping and replacing Chinese gear from networks, Luong said. Moreover, she noted that some 2,000 state and local governments also use Huawei and ZTE equipment in their networks. “We’re talking about a lot of different stakeholders and different places to really remove all this equipment.”

Rip and replace isn’t going well, Gonzales said. “We don’t really even have a thorough accounting of where Chinese equipment is in critical infrastructure, in government networks, state networks and in the defense-industrial base.” We don’t fully understand the risks to parts of the economy, he said. “This is a big deal.”