US-China tech cold war heats up: But Huawei has other irons in the fire

As the trade dispute bites, Chinese tech giant Huawei is pushing on with efforts in regions like the Balkans.

Wary of uncertainty, Huawei expands business in Eastern Europe As the trade dispute goes on, Chinese tech giant Huawei is pushing on with efforts in regions like the Balkans.

With the US trade ban dealing a heavy blow to Huawei in Western markets, the Chinese tech giant is working hard in other regions to avoid a possible $30bn shortfall in revenue.

One such region is Eastern Europe. In the Balkans, Huawei is busy implementing projects, ranging from its Safe and Smart City Solutions to big investments in the communications and information sectors, as well as educational programs for Balkan youth.

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Huawei's activities in the region are mostly seen as complementary to China's Belt and Road Initiative (BRI), whose goal is to provide less-affluent Balkan countries with significant infrastructure and energy projects.

Most of the countries in the Balkans are in the process of negotiating membership of the European Union, but are not yet there and won't be becoming members any time soon. So China has been filling the void.

Beijing's main focus in the region is on Serbia, which has been often regarded as the most influential country in the western Balkans. The BRI projects alone in the country have been estimated to be worth up to $10bn.

Huawei's cooperation with the Serbian government goes back to 2014 when the two sides first signed a memorandum for cooperation.

In 2017, a strategic cooperation agreement was signed between Huawei and the Serbian Ministry of Internal Affairs, for introducing eLTE technologies and the Safe City project for the capital Belgrade.

The implementation of that project has raised lots of privacy concerns among the Serbian public. The main issues revolve around the processing of personal data and why a human-rights impact assessment wasn't conducted beforehand.

Clearly, Western fears of Huawei's intrusive technologies hasn't changed the minds of the Serbian authorities.

Recently, the authorities started discussions with the Chinese company about implementing smart technologies on Serbian roads and highways. Huawei also announced its plans to build an innovation center in the country, which would support the digital transformation in the western Balkans.

The most recent program that the company launched in the region is an educational one called 'One Thousand Dreams'. As Huawei says, the project aims to improve the digital skills of Balkan youth and help young people grasp the benefits of digital technologies.

"We believe that people can make better use of information and digital tools by receiving ICT training," Huawei's spokesperson Liu Yinhanxiao said.

"Our program aims to provide a long-term and sustainable platform for the youth in Serbia and encourage them to work in the ICT sector, thus helping Serbia build an intelligent society in the future."

The same goes for countries like North Macedonia and Albania – the company will invite their brightest tech talents to China, where they can learn their trade from established Huawei professionals.

Elsewhere, also in Serbia's immediate neighborhood, Huawei keeps on developing its Safe and Smart City Solutions. Two months ago, during the Dubrovnik 16+1 conference between China and the Central and Eastern European countries, Huawei also signed an agreement for the Smart City Solution with Croatia.

The Adriatic county, an EU member since 2013, has also seen significant Chinese investments in its infrastructure, notably in railways and seaport projects. Chinese companies doing infrastructure projects are present in tiny Montenegro, too, which is one of Huawei's next likely destinations.

The tech giant's Smart Cities Solutions are also being developed in Turkey, with smart technologies and cloud-computing services already being implemented in Turkish cities like Samsun and Kocaeli.

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While many Western countries can afford to say no to China at the moment, with the trade war and the Huawei ban looming, the same doesn't apply when it comes to the Balkans and most of Eastern Europe, experts argue.

Most of these countries are still developing. When caught in the crossfire between China and the US, their options are limited.

"When China and the US are engaged in a trade war, smaller countries might find themselves in a tough position between these two giants and suffer the most." Kecheng Fang, assistant professor at the Chinese University of Hong Kong, tells ZDNet.

"Technology has become so sophisticated and interdependent that it is almost impossible to rely on the US side or the China side solely."

According to Fang, there is a possibility that some countries from the region will step back from cooperating with China and Huawei, but most will still try to find a balance that protects their interests in the US-China tech cold war.