Foreign Affairs

The Risk of Huawei

When looking around our college classrooms, it’s easy to see how much we take our dependency on our electronics for granted. Everyone has their laptops and tablets out to take notes, and those who are already checked out for the weekend have their phones out too. A quick glance can show the ubiquitous logos of the tech companies that dominate our taste for these gadgets — the apple with a bite out signifying Apple, the “checkered” square for Microsoft, and the pedantic Samsung emblazoned on the backs of the Korean company’s devices.

However, a new logo has recently become more common in our lecture halls. Eight petals bloom out from the word “Huawei” marking devices from the growing Chinese telecom equipment company. Not coincidentally, Huawei has been making frequent appearances in the news as a possible new security threat. As it is slowly becoming more prominent in western markets, this company has become a symbol of the opportunity and risk from a rising China.

Huawei was founded by Ren Zhengfei in 1987. China was in the middle of economic reform which opened up the country to the West, and Ren sought to take advantage of new market-based opportunities. As with most successful entrepreneurial endeavors, the company had its ups and downs before success, but it was eventually recognized by the Chinese Communist Party (CCP) for its profit and growth.

Over time, China’s government has been expanding control over the Chinese private sector to both protect its firms’ competitiveness on the international stage and to step up regulation. The tech sector is especially susceptible to state intervention since the diffusion of information is often linked to the industry’s products. As an example, Tencent, a Chinese video game giant, was forced to give the CCP’s propaganda department a direct role in approving new game titles. Huawei has not been excluded from this trend and has, therefore, had a lot of support from and connection to the government. With a reputation as the world’s largest surveillance state, it’s not hard to imagine the pressure China can put on a telecom company like Huawei.

This could be overlooked, but Huawei is no longer isolated within China. The company has gone global, as demonstrated by my fellow college classmates. Western nations have especially taken notice as they see the company’s connections to the CCP and subsequently fear security breaches that could happen if Huawei’s products are allowed to circulate at the current rate.

Ren himself was a member of the People’s Liberation Army (PLA); most major Chinese companies have members or representatives in both the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC). The suspicion of a clandestine connection to the CCP is not unfounded. There is no separation from the state. The main worry is possible Huawei backdoors, which are features in data and communication systems that would allow surreptitious unauthorized access to the central Chinese government.

This was demonstrated in January 2018, when the African Union Headquarters, which was funded by Chinese aid and furnished in part with Huawei technology, was revealed to have been bugged by Beijing. Over five years, data from the building’s computers were sent to Chinese servers. As this demonstrates, whether it be under the guise of Chinese foreign aid investments or even through direct Huawei private endeavors, backdoors could exist in all systems the company helped develop.

Developing nations are especially susceptible to this risk. As exhibited by the crisis at the African Union HQ, the allure of cheap technology from Huawei through China can make possible security threats seem like necessary risks. For many of these countries, Chinese sources are the only option for development.

Furthermore, if Western governments allowed Huawei to develop their federal communication systems, vital security operations like bilateral intelligence sharing could be compromised. Likewise, with wide consumption of Huawei products, the personal privacy of individual citizens could be jeopardized.

Huawei itself has had a fair share of scandals, with its main offense being the theft of intellectual property rights. Cisco has fought the company for counterfeiting technology, Motorola has been hostile about intellectual property transfers to Nokia, and T-Mobile has accused Huawei of industrial espionage over the Tappy tool (which tested screen receptivity).  

The issue is, when looked at subjectively, Huawei is still an impressive tech giant that has much to offer. The company overtook Apple in global smartphone sales last year, which shows the demand for Huawei products. Consumers have much to gain from its offerings, like the company’s newest phone having a 10x zoom camera and lower prices than the competition. There are also development opportunities, namely through the role the company could play in establishing worldwide integrated 5G networks.

Despite this, Western powers and their allies have taken defensive precautions against Huawei. The U.S. is leading the resistance as it has banned the use of Huawei products from federal agencies and has convinced Australia and New Zealand to join in blocking firms from partnering with Huawei to develop 5G networks. Japan is ceasing future business with Huawei. Canada arrested Huawei’s CFO and Ren’s daughter, Meng Wanzhou, on an extradition request from the U.S. for Iranian sanction violation, and have further prosecuted her over the charges of obstruction of justice and attempted theft of trade secrets. (While a bit tangential, various Apple products were confiscated from Meng at her arrest. I suppose this shows that, along with hostile Western governments, Huawei still has many obstacles in its path.)

As mentioned before, while there are risks, there is much Huawei can offer. Even with apprehensions from British and German intelligence, a damning U.K. report, and appeals by the U.S., the EU recognizes this fact and has not banned the company. For Europe to both reap the benefits the company has to offer and appeal to China for further business, Huawei has been allowed to help develop the region’s 5G networks.

Huawei denies any wrongdoings it is accused of and claims Western aggression is a thinly-veiled political move against China. The company is actually suing the U.S. government over the ban on its products from federal agencies. Despite the bad press and accusations, the company doesn’t seem to be fazed in its efforts to stay at the top. As it is mainly owned by employees and not public investors, a feature in line with Chinese communism more so than Western capitalism, bans by suspicious governments that hurts profits won’t lead to a stock collapse. It has also developed its own operating system in case it is banned from existing Microsoft and Google systems. These efforts show Huawei won’t be backing down any time soon, and the company’s recent profits don’t signal hard times ahead.

In an increasingly digital world where the furthering of our communications capabilities is essential, the world needs all the collaboration it can get. Perhaps the U.S. is overreacting and missing out on a prime development and business opportunity. At the same time, maintaining national security is an equally important priority. The EU may be being ignorant to a threat staring it in the face.

Back in my classroom, a friend shows off his Huawei laptop. Its attractive display and fast performance are quite convincing reasons to support this foreign company. However, there’s a simultaneous fear that through a hidden backdoor, someone across the Pacific is watching, and patiently waiting.

1 reply »

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s