December 12, 2012

Let the Trade Wars Begin (Again)

Reuters today reported on an internal European Union Report purportedly recommending action against Chinese telecom equipment venders based on a combination of threats both to EU "security" and the commercial viability of EU telecom gear producers.

While U.S. authorities have taken great pains to develop convoluted and often contradictory and illogical conspiracy theories to justify their Cold War mentality-inspired market distortion, it would seem from the brief detail provided by Reuters that the EU's "security" veil is paper thin.  Call it what it is: Good old fashioned protectionism.

Let the trade wars begin (again).

In the (perceived) wasteland of North American telecom gear-makers, the landscape appears bleak: Nortel is gone.  Motorola is toast.  Yes, Cisco remains, indeed, aspires to extend it's business into mainstream telecom, but, it would seem, it hopes to do so on the back of anti-competitive U.S. Government protectionism.

And now, in Europe, the protectionist sirens sing.  Alcatel-Lucent, the French-based vender that swallowed the remains of America's Bell Labs, is challenged to maintain its outlandish margins in the face of commercially-rational competition from China-based companies.  Nokia-Siemens, the ever-struggling joint venture combining the flailing infrastructure assets of Germany's Siemens and Finland's Nokia, is faring yet worse.  Ericsson, long-bolstered by Sweden's government-commissioned export agency EKN, is better off, but feeling the pinch, and likely as not, eager to suckle a protectionist teat.


According to the Reuters' story, the EU Report found that "prices of equipment from Huawei and ZTE were on average 18 percent below those of EU producers."  The suggested assumption is that  the China-based multinationals are government-subsidized or otherwise "cheating."   Perhaps it would be worthwhile to consider some of the commercial realities:

Alcatel-Lucent, Ericsson, Nokia-Siemens and Cisco have all off-shored the lion's share of their coding and production and a healthy dose of their R&D, much of it to China where they can tap vast and markedly less-costly yet high-quality labor pools.   Even so, they maintain significant and bloated overhead in their legacy headquarters' markets, often precluded by regulation or law or social pressure from trimming (slashing?) where necessary to remain commercially competitive.

And the fact that the younger, slimmer, more dynamic China-based venders can deliver competitive product at lower cost comes as a surprise?

No, it is what it is. Protectionism.  And remarkably misguided, indeed, reckless.

Retaliation is a given.  Copy-catting in other markets, equally likely.  But the impact goes deeper.  For instance, Huawei did $32 billion in business last year.  Roughly one-third of the components in Huawei infrastructure solutions come from American suppliers.  That amounted to about $6.6 billion in procurements from U.S.-based high-tech companies last year alone.  That's a few tens of thousands of American jobs (this is where the earlier referenced to "perceived" wasteland of North American telecom gear-makers comes in: In fact, the North American, and particularly U.S. telecom industry is alive and well,just in a different form than before).  Europe accounts for just shy of another third of Huawei components, with similar economic benefits.

Sure, maybe all of these suppliers can shift their shipments to the favored "Western" venders if the U.S. and EU succeed in walling off free trade and competition.  Or maybe not.  Remember, all of the "Westerners" are in fact as "Chinese" as Huawei in terms of R&D, coding and production.  If the U.S. and EU succeed in undoing sixty-plus years of free trade, competition and innovation, it will almost certainly disrupt the global supply chains that power the ecosystems behind not just the likes of Huawei, but pretty much all of the venders.  

Yes, in five, perhaps ten years, new ecosystems should develop inside the newly-proscribed "blocs," but what commercial, macro-economic and innovative damage will have been wrought in the interim?  And for what purpose?  This is not about "national security."  It never has been.   This is just bad policy.  And it's very likely gonna hurt.  Everyone.

Æbbe the Younger and Chinese Outward Investment

Globalization is real and capital flows that once ran largely one-way - West to East - are increasingly travelling a two lane highway.  The emergence of China as a global economic powerhouse and the five-year long lingering malaise in Western economies are significant factors behind this capital flow evolution.  As China continues to flex its new-found economic and commercial muscle, other markets are racing (or not) to roll out the welcome mat.

Chinese outward investment has been on a relatively rapid rise since the mid-2000's.  According to China's Ministry of Commerce, outward investment in 2005 totaled  a mere $12.3 billion.  By 2008, that number had climbed to $55.9 billion for the year.  2011 saw the level of outward Chinese investment top $70 billion, and that pace is being matched in 2012.  It is interesting to consider where those funds are flowing.  And why.

According to Heritage Foundation data, roughly 8% of that investment - $42 billion - found its way to the U.S. (putting the US just slightly below Latin America as an investment destination), but as much as 12% was devoted to Europe, with the UK receiving roughly one-fifth of Chinese foreign investment bound for the EU (about $12 billion, or 2% of total Chinese outward investment).    

While there are any number of comparative indicators to consider, let's look at the size of the economies as a belweather for the scope of the potential investment opportunity:  

The delta between the 2011 $17.5 trillion aggregate GDP of the European Union and the U.S. 2011 GDP of just over $15 trillion would seem to jibe with the delta in Chinese investment into Europe versus the U.S.  But, U.S. GDP eclipses the UK's (just shy of $2.5 trillion in 2011) by a factor of five, which, when factored against the Chinese capital inflow, would seem to indicate that the UK benefits from a disproportionate level of Chinese investment vis a vis the U.S.  

Again, while there are any number of potential factors to consider, for the sake of brevity (and my agenda), let's consider one rather telling illustrative comparative experience (regular readers: here we go...):

In 2005, Huawei Technologies struck a landmark telecommunications infrastructure deal with British Telecom.  Over the last 7 years Huawei has grown that relationship, and deployed network equipment with a range of other UK operators, from Everything Everywhere to Orange to Virgin Media.    In September, 2012, Huawei announced it would increase its investment in the UK by more than $2 billion over the next five years.

In 2010, the U.S. Government intervened in the multi-billion dollar Sprint-Nextel telecommunications network upgrade to prevent Sprint from selecting Huawei as a vender, on supposed national security grounds.   Pulled off the table were potential billions in capital and operating expense savings for Sprint, as well as world-leading technology that uniquely met Sprint's complicated network needs.  Japan's Softbank recently announced its purchase of the beleaguered company.

Did the British sacrifice their national security by allowing Huawei to compete and invest?  Of course not.  Did they share concerns similar to those expressed in the U.S.?  Yes, indeed.  

The delta between the way the U.S. and the UK addressed Huawei epitomizes the delta between their approaches to attracting (or discouraging) ever-growing Chinese outbound investment capital, which in turn explains the seeming disproportionality mentioned above.  

The UK took a coordinated and comprehensive commercially pragmatic approach to a perceived security concern by employing appropriate technological tools and related disciplines to safeguard the integrity of UK telecom networks while simultaneously adhering to its commitment to free and fair trade and competition and ensuring that UK operators could avail themselves of world-class rationally-priced technology.  Huawei and other China-based investment are warmly welcomed.  The economy benefits.  The nation is secure.

The U.S., which unlike the UK harbors plans - contingency or otherwise - to one day go toe-to-toe with the Chinese (whether virtually or kinetically), has taken a chaotic, uncoordinated, commerce-be-damned, Cold War-inspired protectionist approach, stringing together odd, underhanded, market-distorting and anticompetitive attempts to somehow blackball Huawei from doing business in the U.S. 

 Is the nation any more secure?  Nope.  All of the competitor gear is at least in part sourced from China as well and, well, duh, is subject to the same potential global supply chain and other vulnerabilities as Huawei's.  Does the economy benefit?  Nope.  Less competition, higher prices, less innovation, fewer jobs, protectionist retaliation...and, of course, less foreign investment.

And this ain't just about Huawei.  Sure, torpedoing the Sprint deal effectively tanked the possibility that Huawei might have invested the billions in the U.S. that it has subsequently invested in the UK.  And sure, the treatment Huawei has received in the U.S. could easily have contributed (albeit in some vague, indirect way) to the December 2012 decision to invest almost $100 million in smartphone R&D in Finland instead of Texas, New Jersey or California, any one of which has a wealth of displaced telecom gadget expertise to rival Nokia's home market.

But its bigger than Huawei.  The signal to Chinese companies looking to invest in the U.S. is clear.  There are no rules.  The environment is at best capricious.  So they think twice, or just go elsewhere altogether...  We are myopically engineering lost opportunities, at the expense of American workers, families and innovators, and all in the name of so-called national security policies that are easily demonstrated to be utterly ineffective.

Or look at it this way:

As legend has it, in 867 AD, Viking pirates from Zealand and Uppsala landed in Scotland. When news of the raid reached Æbbe the Younger, the Mother Superior of a monastery of Coldingham, Scotland, she gathered her nuns together and urged them to disfigure themselves, so that they might be unappealing to the Vikings. She demonstrated this by cutting off her nose and upper lip, and the nuns proceeded to do the same. The Viking raiders were so disgusted that they burned the entire building to the ground.  This legend is thought to be the origin of the phrase 'cutting off the nose to spite the face'.  

Get it?

November 30, 2012

The Huawei-an Islands...

Yesterday, at the close of the "Transformational Trends 2013 and Beyond" conference hosted in Washington by the Foreign Policy Group and the Department of State, Secretary Clinton offered a wide range of observations on pressing international issues and trends.

When speaking to the issue of the contested Senkaku (Japanese)/Diaoyu (Chinese) islands in the East China Sea, and while stressing that the U.S. has not taken a position on which country has legal sovereignty over the disputed isles, the Secretary offered a colloquial recounting of a  Chinese counterpart having suggested that if Japan could simply "nationalize" the East China Sea islands (which are actually little more than large, yet strategic, rocks), then why could not China lay claim to Hawaii?

Secretary Clinton reported having responded something to the effect of "go ahead, and then we'll go to arbitration and prove that we own them."  Her point, she went on, is that while the U.S. has not taken a position on the ownership of the Senkaku/Diaoyu, the U.S. feels strongly that the dispute should be settled according to legal principles.  Indeed, she made more than one such reference to the need for China to address such and related matters on a "rules-based" basis.


So, recapping, if I understood the Secretary correctly, if China claims sovereignty over the disputed rocks then China should follow rules-based processes to prove its claim.

(For anyone who has been reading this blog over the last two years, you doubtless know where this is going...)

My employer, China-based Huawei Technologies, has for a number of years suffered unfounded, unsubstantiated U.S. Government claims that the company is somehow a threat to U.S. national security.  No proof.  No rules-based process.  Not too different from China staking a wild claim to the Hawaiian islands.  With all due respect to the Secretary, the U.S. can't have it both ways.

If we want China to behave according to certain norms, then it is incumbent upon us to set the right example.  If the U.S. Government believes that Huawei is somehow more vulnerable to compromise than its competitors which, regardless of country of headquarters, are all also researching and coding and manufacturing in China, then the U.S. Government should follow a rules-based process to prove its claims.  And, when those claims are proven to be no less wild than a hypothetical Chinese claim to Hawaii, the U.S. Government should accept reality and bring an end to its opaque, rule-less, market-distorting Huawei blockade.

Just sayin'...

November 16, 2012

Thai Food, Credit Card Security and Huawei

I went to a local Thai restaurant for lunch today. When it was time to pay, my credit card was declined. Puzzled, I offered an alternative card, paid, and returned to the office.

Straight away, I called the credit card company about the first card and, after jumping a number of very appropriate security hurdles to establish my identity, I was informed my card had been suspended due to suspicious activity.

Expressing my thanks, I asked about the suspicious activity and it was explained that four identical purchases for $30-something dollars had taken place at a jewelry store in Austin Texas. I confirmed that I hadn’t been in Austin Texas so the charges were obviously bogus. I asked, however, why someone would use my account for such petty charges. The fraud team representative explained that this is a common approach – small charges that won’t be noticed, ramping up over time.

She then asked if my family was in possession of all of the cards on the account. I said I thought so. Checking the record, she then noted that it appeared as if no card had been presented for the transaction, that my account number had been entered manually, so whoever did it didn’t need my card, just the number. Then, she tossed out: “Or it could have been on an online transaction.”


I asked about the jewelry store. She gave me the name. I Googled it. Yes, the store did sell jewelry – class rings. As well as caps and gowns, yearbooks and other graduation-related paraphernalia. And, notably, the “store” was an e-tailer, not a store - a one-time mail-order shop.


Now that I’d figured out what was going on, I explained to the fraud team representative that I am the proud father of 17-year-old quadruplets, each half a year shy of graduating. A quick check with home confirmed that the kids had recently ordered caps or gowns, which I further relayed to the fraud rep, asking her to remove the hold on my card since the purchases were legitimate. I expressed thanks for the strict procedures that the credit card company had in place and she apologized to me for any inconvenience.

The intent of the security measures was sterling – prevent fraud and theft. The filters were good: An unusual location and an unusual purchasing pattern. And the prophylactic was powerful – shut it down. Yet, some of the assumptions were flawed: no card presented doesn’t mean hand-keyed. And the due diligence was scant: Just because an outlet sells jewelry does not mean it is a jewelry store. But these were afterthoughts, embellishments - the location/pattern profile was enough.

But, best intentions aside, the profile was wrong. Not because the system couldn’t comprehend or was ignoring the facts, but, rather, because the system is blind. But, importantly, as demonstrated in the above, it can be corrected.

There is an interesting if indirect analogy in this story that applies to Huawei and the treatment it has received in the U.S.

The credit card fraud prevention system blocked a transaction because the nature of the transaction didn’t meet an acceptable profile therefore it was suspicious. Huawei, based in China, has been blocked from doing business in the U.S. because it’s Chinese heritage does not meet an acceptable profile for a multinational technology company, and therefore is deemed suspicious.

The cap and gown transaction need not have been blocked, and, indeed, was approved once it was explained that while it was unusual, it was not suspicious. The profile – a one-size-fits-all – was understood to have been incorrect.  Huawei is in a similar situation, but has thus far been unable to help customer service accept the facts. Rather, the fraud team is insisting, based on flawed assumptions and a lack of due diligence, that if it doesn’t meet the profile, it can’t be approved. The profile cannot be corrected.

Quadruplets are unusual and beyond the average persons’ frame of reference. So too are privately-held multinationals with a Chinese heritage. Just as the number of multiple births has increased over the last decade, so too will the number of independent Chinese multinationals. With time, “acceptable profiles” will evolve. What are we waiting for?

April 29, 2012

Huawei, Rep. Wolf and George Clooney

Representative Wolf (R-VA) has some strong concerns about China, many of which may well have merit.   Sadly, Rep. Wolf's expressions of concern about China, however well-justified, sacrifice credibility when he kowtows to industry friends who seemingly seek to leverage the Congressman's China concerns to preclude competition and innovation in the U.S. information and communications technology industry.

Recently, as reported by The National Journal (link) and others, Rep. Wolf wrote to a Managing Partner at a D.C. law firm calling on that Partner to drop representation of China-based multinational Huawei, my employer (Please note that the comments in this blog are my personal reflections).

Rep. Wolf's letter rehashes oft-cited, never-substantiated disinformation about Huawei, including purported ties to the Chinese Government, as justification for his request of the law firm.  He further cites as some sort of factual basis for his opinion an April 6, 2012 Wall Street Journal article that quoted Cisco CEO John Chambers saying that Huawei is Cisco's "toughest rival" and that Huawei doesn't always "play by the rules."

Among multiple ironies associated with Rep. Wolf's seeming support for Cisco's commercial de-positioning campaign, is the fact that Cisco conducts significant research and development, codes software, builds products and invests billions of dollars annually in China, Chinese-based innovation, and Chinese education and jobs.

There has never been a shred of proof of Huawei having any undue connection to the Chinese Government.  Notably, Huawei, which bears some responsibility for having allowed disinformation to fester for the better part of a decade, has since its February 2011 "Open Letter" (link) continually and proactively communicated detailed facts about the company, and has consistently been met with nothing more than unsubstantiated politically- or competitively-inspired myth and innuendo.

But this isn't Rep. Wolf's first run at the company.  On March 19, 2012, Wolf made remarks for the Congressional Record (link), yet again undermining his concerns about China-based cyber activities by purporting links between Huawei and the Chinese Government (citing numerous never-substantiated sources, U.S. Government and otherwise), and almost amusingly warning that "U.S. network carriers should not be selling Huawei devices...but if they do, they have an obligation to inform their customers of these threats."  Given that virtually every mobile device (and computer, for that matter) is made in China, the carriers are going to have to cede a lot of display space to Rep. Wolf's proposed warning brochures...

Wolf's letter also quotes U.S. Secretary of Commerce John Bryson making fuzzy observations about Huawei, including the quizzical statement: "It appears that Huawei has capabilities that we may not fully detect to divert information."  Sadly, Rep. Wolf's letter is too brief to include yet more "fun with facts" from his exchange with the Secretary that took place during a March 20, 2012 Commerce-State-Justice Appropriations Subcommittee meeting.  So, it seems only fair that we review some highlights (errors are not mine, they come verbatim from the transcript), with comments.  I'll ignore all of the tired references to Huawei's "close connections" to Chinese intelligence, given that they are backed with zero substance and fly in the face of well-publicized facts:

WOLF: "...The Wall Street Journal reported that quote, 'Huawei's network business has stride at the expense of struggling Western network companies such as Alcatel, Lucent Company and the Korea's Siemens networks.'  The bottom line is that these subsidies are costing American jobs and distorting the global market."

Comment: Ok, this one is easy enough... Yes, competition can have an impact on incumbents. But, the incumbents referenced - based in France and Finland/Germany and both with significant operations in China - have been cutting American jobs and investments in the U.S. for years now while Huawei has been adding thousands of jobs, investing hundreds of millions of dollars in U.S. innovation, and procuring billions of dollars worth of goods and services from U.S. based technology companies.

WOLF: "The Chinese government has Catholic bishops on house arrest.  The Chinese government's connection to Huawei, the People's Liberation Army, has Protestant pastors -- house Protestant pastors in jail...  They have a 2010 Nobel Prize winner, Xiabo in jail.  They were not allowed to go to Oslo to pick up the award nor would they let his wife go.  Based on the policies of the Chinese government and the People's Liberation Army in connection to Huawei too, we have to keep in mind all the time."

Comment: Huh?

WOLF: "We cannot disregard the fundamental connection that Huawei's doing and that they're connected within the Chinese government and the activities of the Chinese government and lastly, there was a lot of news last week when George Clooney who was (inaudible) went to Sudan.  I was in Southern Sudan, in that refugee camp in (Nuba).  The Chinese, the People's Liberation Army, connected to Huawei, are putting Chinese rockets that go 100 kilometers that are killing people..."

Comment: WTF?

WOLF: "...I saw that the president met with George Clooney, so there's no breakdown. I think it's important that the White House understand the whole Huawei connection so that this company doesn't hire Washington lawyers and lobbyists and people plugged in to begin to approach the White House to bypass the good work that you're going to be doing with regard to Huawei and go around you by going into the White House because as you can remind the White House, when the president met with George Clooney and that's on this issue.  That has connectivity to the whole Huawei issue."

Comment:  I am speechless...

To the extent that Rep. Wolf's credibility may have been undermined by his curtsy to Cisco, it seems utterly blown away by the flights of fancy featured in his remarks on the record above.  Indeed, one really has to wonder what Secretary Bryson and anyone else in the room must have been thinking as the words spewed forth...

April 03, 2012

Fairly addressing the "Huawei Challenge"

Huawei Technologies is a world leading information and communications technology solutions provider. Huawei's solutions have been deployed in over 140 countries, by over 500 operators, and are currently connecting around one-third of the world's population to telecommunications and broadband services.

Yet, for purported "national security" reasons, Huawei has been precluded by certain governments in certain instances from competing for certain projects or making select acquisitions, as most-recently highlighted in the context of the Australian National Broadband Network (NBN) roll-out, but more notably in a string of incidents in the U.S. dating back to 2008.

Barring Huawei from projects means less competition, less industry-wide innovation, less choice for telecommunications operators, more expensive networks, and pricier broadband services for consumers.

At the heart of the so-called national security concerns is the fact that Huawei is based in China.

Swirling around this fundamental fact - for the better part of the last decade - have been numerous universally-unsubstantiated allegations, innuendo, myth and untruths about Huawei, often as not encouraged by Huawei's global competitors.

But, the only demonstrable fact - for whatever political or other reasons of some concern - is that Huawei is based in China.

So what about the competition?

Due to the global market-based realities that have evolved over the last 10-15 years, Ericsson, Alcatel-Lucent, Nokia-Siemens, Motorola, Cisco and virtually all other major ICT venders are also heavily investing, conducting research and development, coding software, manufacturing product and supporting tens of thousands of jobs in China.

What is it about Huawei that makes it different? Just the Chinese heritage? After all, no other concern has ever been validated. Ever. Indeed, if all such concerns remain unsubstantiated, then governments are seemingly driving less competition, less innovation, less choice, more expensive networks, and pricier broadband services for their citizens.

That said, given the history (if nothing's been proven over the last ten years it's unlikely to happen now), let's assume that the decade of myth and innuendo will remain nothing more than that and turn our attention to more fully addressing the "Chinese product" concern.

Governments - politicians, policy-makers, regulators, legislators - that are contemplating mechanisms to block so-called Chinese companies from their ICT sectors (or elements thereof) should at the very least conduct such contemplation in the context of a full and public review and understanding of all of the facts and their implications.

How might we achieve this? Simple. If "Chinese product" are a concern, then every ICT vender should publicly disclose and detail and answer questions related to their global operations, worldwide supply chains, operations in China, as well as (while we're at it) their security practices and disciplines.

Notably, half of this information is on the public record (if seemingly unnoticed). Why would anyone object?

Bottom line: National security concerns are real - for any country. Telecommunications network and critical infrastructure protection are vital national and international challenges, as is protecting sensitive government and commercial information. True, honest and effective solutions to meeting these challenges will only be realized with all of the facts on the table.

The facts are that all of these companies are global, rely on the same global supply chains, and the same global ICT supplier and partner ecosystems - they share the same potential vulnerabilities. This is undeniable.

Once the facts are understood, once it is acknowledged that every ICT vender is a globalized company, including with significant R&D, coding and production in China (and in the U.S., for those who might harbor such concerns), then the conversation about "national" security concerns can turn in a more rational, fact-based, global solution-oriented direction.

Why would anyone object?

Full disclosure (in case you hadn't gathered): I work for Huawei.

March 28, 2012

MAD About Cyber-Security

While the decades of the Cold War were witness to various and sundry proxy fights in discrete, far-flung battlefields, as well as rare moments of frightening brinksmanship, the relationship between the U.S and the Soviet Union was largely governed by the very real-world military doctrine of mutually assured destruction (MAD). Simply put, given the massive nuclear arsenals on both sides, it would have been, well, mad, to contemplate mutual annihilation - neither side had any rational incentive to initiate a full-scale conflict because retaliation would ensure that victory was utterly unachievable.

Key to the tacit superpower “agreement” was the need to ensure that the precarious balance not be upended, for instance, by the spread of the technology capable of enabling unstable powers to enter the game. With NATO and the Soviets and Satellites in an effective stand-off (excepting “controllable” proxy spats), the imperative was to manage proliferation, hence the 1970 Non-Proliferation Treaty (NPT). While history has demonstrated that the NPT was only marginally effective, it complemented MAD in precluding escalation to any world-devastating conflict.

Flash forward to today’s era of cyber-insecurity. While the landscape is not as well-defined as during the black and white, us-vs.-them Cold War days (State and non-State sponsored cyber activity is common worldwide), the two biggest actors, the U.S. and China, are caught up in a maddening (as it were) dance. While various States and non-States – Russia, Israel, Anonymous, WikiLeaks (to name a few) - are wielding their cyber-tools with only sporadic and superficial notice, the U.S. and China are ratcheting up their bilateral cyber-tension, in terms of both action and rhetoric.

Not a day goes by that we don’t read of Chinese cyber-incursions into U.S. networks. Not a week passes that we don’t hear one or another strident Government Agency or Congressional voice decrying Chinese theft of secrets and threats to U.S. critical infrastructure. Presumably, the Chinese have the same concerns about American activity inside their cyber-borders and networks – they are perhaps just less publicly vocal on the topic. In Washington, however, cyber has become the scare de jour.

What’s lost in the fear-mongering hullaballoo is the fact that both sides are mutually vulnerable, to each other, and to other actors in what is essentially a borderless cyber-world. National governments and globalized industry struggle – in frustrating fits and starts - to define best practices to secure supply chains and to develop technologies and tools to monitor and analyze digital traffic to detect, quarantine and quash the potentially nefarious. Flash back to the early Cold War: Would the signatories to the NPT have even had a treaty to sign in the absence of Superpower MADness?

Fragmented (national) solutions to cyber-threats will not effectively address what is intrinsically a global phenomenon. Indeed, beyond being ineffective in managing cyber-threats, such initiatives will ultimately result in further fragmentation and disruption – in terms of global information and communications technology (ICT) supply chains, digital commerce, and, ultimately, innovation and economic recovery and growth.

The facts are – as anyone engaged in any intellectually honest discussion must acknowledge – that effective solutions to cyber-security concerns must be universal because cyber-vulnerabilities are shared across the entire ICT industry and every country because the ICT industry – ALL players – is transnational. But, until and unless the U.S. and China come to some accord in terms of acceptable ("controllable") cyber behavior, a fact-based, rational and effective solution to our cyber-worries may well remain elusive. MADdening isn’t it?

It’s time to borrow from the past, and not in terms of Cold War, knee-jerk, “they’re all evil” sentiments, but, rather, in terms of settling into a MAD-like Nash Equilibrium. The U.S. and China must agree to certain behaviors, and then project adherence to those behaviors via some latter-day NPT-like global cyber regime. (Please don’t read that wrong – it’s obviously too late to stop proliferation of tools of digital mischief, if it was ever possible. And, just as the criminalization of hacking is a pipe dream - which even if achieved would fall flat in terms of enforcement - so too are UN cyber-inspectors).

Bottom line: All of today's inflammatory cyber-rhetoric and cyber-political flailing about is serving no-one’s true cyber-interests. Globalization is real. The ICT industry is global. Our digital economies are increasingly interdependent. Cyber-threats do not respect - or even recognize - national borders (e.g. Stuxnet did some collateral damage outside Iran). Today's superpowers must acknowledge that their bilateral (and mutual multilateral) tension and conflict are not going away and, as such, should at the very least strive to manage common vulnerabilities in such a manner that both sides can continue to maintain their respective national AND economic securities, to their mutual benefit.

Just sayin'...