The big business story of last week, which got lost in the Trump-obsessed coverage of U.S. media, was Vodafone’s announcement Thursday that it is “pausing” its purchase of Huawei equipment for its core telecommunications networks. This comes on top of stronger actions taken by the governments of the U.S., Australia and New Zealand banning use of Huawei equipment, and a BT decision to remove Huawei gear from its network. Meanwhile on Saturday, Canadian Prime Minister Justin Trudeau fired his ambassador to China for suggesting a case could be made against Canada’s extradition of detained Huawei CFO Meng Wanzhou to the U.S.
We’ve said in this space before that data is the oil of the new industrial revolution. So it shouldn’t be surprising that, just as oil became the great geopolitical chess piece of the 20th century, data is rapidly becoming the same in the 21st. And while much of President Trump’s foreign policy has been widely rejected by U.S. allies around the globe, his push on this front is resonating, as David Sanger reported in a smart piece in Sunday’s New York Times.
There’s more to this story than just whether one wayward Chinese company is breaking Western laws. Discussions in Davos last week made clear that “data governance” has become one of the defining issues of our times. Even as Western governments—plus Japan—call for increased regulation over data use, the Chinese government is ignoring privacy concerns in its race to pull ahead in key areas of AI development—such as facial recognition—and increase its control over Chinese society. While Apple may fight with the FBI over unlocking iPhones and Google engineers may protest their company’s work with the Defense Department, Chinese companies take it for granted that when their government goes drilling for data, they provide the rigs. This is what prompted George Soros—usually the president’s polar opposite on political issues—to sound stunningly Trump-like in calling China’s tech policies a “mortal danger” to open societies, as Clay Chandler reported here Saturday.
Regular readers of this newsletter know Fortune is devoted to a global dialogue on important business issues—and this one is quickly rising to the top of the list. This year, we plan to host two business events in China – the Fortune Global Sustainability Forum in Yunnan province September 4-6, and the Fortune Global Tech Forum, which we hope to bring back to Guangzhou for its third year in November. The Huawei brouhaha makes clear that, regardless of how the current U.S.-China trade dispute gets resolved—or for that matter, how the Trump presidency plays out—the great global data divide will only get deeper, and challenge business and government leaders for a generation to come.
More news below.
The U.S. has lifted sanctions on the Oleg Deripaska-linked Rusal, En+ Group and EuroSibEnergo. The Rusal move is good news for the global aluminum market, and the metal fell in response. Deripaska himself remains under sanctions. Financial Times
President Trump said it was “50-50” as to whether congressional negotiators would be able to strike a deal over funding for his big wall, and refused to rule out the possibility of yet another government shutdown should that deal fail to emerge. Wall Street Journal
Former Starbucks chair Howard Schultz is considering a 2020 presidential bid as an independent. Schultz has been a big Democratic donor, and the party is really not thrilled with the prospect of him drawing away votes. Julian Castro, who hopes to get the Democratic nomination, said a Schultz independent campaign “would provide Donald Trump with his best hope of getting re-elected.” USA Today
The SEC is now looking at whether Nissan was forthright about its executive pay in the U.S. and provided enough controls to protect against improper payments, giving the company more headaches in the wake of former chair Carlos Ghosn’s fall from grace. Nissan has confirmed receiving an inquiry. Bloomberg
Around the Water Cooler
The South China Morning Post provides another angle on the issue of forced technology transfers in China—some U.S. companies are just fine with the arrangements if it gives them reach into the Chinese market. But only some. SCMP
The business leaders at Davos may have been talking about creating jobs in the “Fourth Industrial Revolution,” but really they’re plotting to automate as many jobs as they can, so they can get away with paying as few people as they can. That’s the gist of this must-read Kevin Roose piece. New York Times
Vogue is launching a new title aimed at fashion industry professionals. Vogue Business will be a niche, digital-only publication. It’s also the first product to come out of Condé Nast’s in-house incubator. BBC
Jennifer Morgan, a president at SAP, is starting a podcast called A Call to Lead, aimed at “emerging leaders” in business. She’s tapping some top-notch guests for the podcast, such as Michelle Obama, Jill Biden and Harvard Business School’s Frances Frei. Fortune