AMAC Exclusive by Joshua Charles
One of the greatest success stories of the Trump administration is one you have likely never heard. It’s the story of how a former business leader turned Under Secretary of State helped prevent what many had assumed was a fait accompli: the domination of the worldwide rollout of cellular 5G wireless by Communist China.
5G represents a quantum leap forward over the current generation of cellular technology—in some cases up to ten times faster.
The implications of this transformation are far-reaching, because whatever country dominates 5G will likely dominate a host of other technologies that will depend on it—technologies like autonomous vehicles, AI, quantum computing, and many others.
In early 2019, the situation was grim for the United States and the western allies. Chinese companies like Huawei were preparing to roll out 5G networks around the world. Like many Chinese companies, Huawei is essentially a corporate arm of the Chinese Communist Party (CCP), and is subject to its National Intelligence Law, which means the government can demand Huawei hand over any data it has at any time. That means that the CCP could potentially access the personal, private, and sensitive data of people, companies, and governments around the world just like it does with its own citizens. In China, Huawei’s technology has become the backbone of the CCP’s surveillance state and “social credit system.” If they built the world’s 5G networks, they’d essentially be extending that surveillance state around the world. And yet, since the CCP was heavily subsidizing Huawei, the Chinese technology giant was able to outbid most of the competition. That’s to say nothing of the CCP’s theft of US technology and know-how. For decades, they had been using our openness against us, while restricting our access to their markets.
But then President Trump signed an executive order to crack down on Huawei equipment, empowering the federal government to block American companies from purchasing foreign made telecommunications equipment deemed to be a national security risk. In addition, President Trump nominated Keith Krach to be Under Secretary of State for Economic Growth, Energy, and the Environment to help carry out his policy of standing up to China. Secretary of State Pompeo gave Krach the specific charge “to develop and operationalize a global economic security strategy that drives economic growth, maximizes national security, and combats Chinese economic aggression.” Krach was unanimously confirmed by the Senate in the summer of 2019.
From his days as a Silicon Valley CEO Krach had learned that market leadership isn’t determined by size, but by momentum. For Krach it was clear that if the United States was going to successfully confront “China, Inc.,” then he and his team would need to immediately design a plan to reverse Huawei’s momentum. They feared that if China, Inc. was allowed to deploy 5G globally, what Krach called the “Great One-Way China Firewall” would be extended around the world: the digital “wall” that allows CCP influence, propaganda, and coercion to go out, but keeps the truth from ever coming back into China. So Krach and his team set out to stop Huawei and establish what they called a 5G “beachhead” that would provide a base for competing against China, Inc. across all economic sectors.
They did so by focusing on the key issue they had identified: trust. They realized it was difficult for many countries to stand up to China, Inc. because China would retaliate and make it painful. But Krach knew that there’s power in numbers, and when you stand up to a bully with a group, the bully tends to back down. The alliance that Krach helped coalesce to combat the China, Inc. bully became known as the Clean Network. Every member committed to a set of digital trust standards, and trust principles like integrity, accountability, transparency, reciprocity, and respect for the rule of law—the exact things Huawei and China, Inc. lacked. In 5G, that meant using equipment provided by trusted providers whose data could not be compromised by malign actors like the CCP.
The Clean Network was announced on May 15, 2020. Along with the Treasury and Commerce Departments, Krach announced steps the US government was taking to prevent Huawei from obtaining the advanced American technology they needed to build their 5G equipment. He also announced the biggest onshoring in U.S. history: Taiwanese semiconductor manufacturer TSMC would be building its newest manufacturing plant in Arizona. This meant that a sizable portion of the most advanced computer chips that were so important to building 5G and other future technologies would be built in the US rather than 100 miles off the coast of Communist China. Finally, he announced the implementation of the “Clean Path,” a new State Department policy that prohibited any communications coming into or out of any US diplomatic facilities from touching Huawei equipment. The entire line had to be “clean.” This immediately provided an economic incentive for telecom companies around the world to reevaluate their initial love affair with Huawei, and include non-Huawei suppliers in their 5G infrastructure.
That was just the start. From there, Krach and his team began a lightning-fast marketing campaign for the Clean Network. Nothing less was at stake than the future of freedom vs. authoritarianism, they said. They also knew that people around the world were concerned about the security of their data and most sensitive information. So Krach and his team asked them, “Who do you trust?” They already knew the answer.
At the same time, Krach amplified the moral high ground of democratic values, calling out the CCP’s bullying abroad, and their repressive conduct at home. He was one of the first Trump administration officials to explicitly call China’s actions against the Uighur Muslims “genocide.” His Clean Team constantly emphasized that Huawei was simply an extension of the CCP, and so long as they were pawns of the Chinese government, they could not be trusted.
At first the Clean Network expanded slowly, but then faster and faster. Around the world, countries and telecom companies were signing up for the Clean Network’s value proposition based on a set of clear trust principles. Huawei began losing contracts left and right.
By Krach’s last day at the State Department, the Clean Network included 60 countries that account for two thirds of the world’s GDP, 200+ telecoms, and multiple high-tech companies like Oracle. The tide had turned against Huawei and China, Inc. And perhaps more importantly, Krach and his team had pioneered a new model of economic warcraft that could be used and adapted for competing against China across all economic sectors.
In early 2020, the world was resigned to a CCP-backed company dominating 5G technology. President Trump, Secretary Pompeo, the Clean Network, and Keith Krach changed all of that, and delivered one of the greatest untold success stories in the fight against China, Inc.