Should we worry about Huawei?

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Huawei, the Chinese telecoms giant, has hit the headlines over the arrest of the founder’s daughter in Canada for extradition to the United States.

But the firm, which manufactures a range of technology from network equipment to mobile phones, is on the agenda for other reasons too.

Increasingly Western governments are blocking telecoms companies from using Huawei in new communications networks, citing security concerns.

So far the UK has held back from any formal ban. So does the firm pose a threat?

What is Huawei?

If you go browsing for a new mobile phone handset, you’ll see Huawei smartphones alongside the other market leaders. The most recent figures suggest the Chinese brand has grown so fast it now has about 15% of the global smartphone market, second only to Samsung and ahead of Apple.

But less obvious to ordinary consumers, Huawei has also been growing rapidly in the market for the equipment that mobile phone networks run on.

As China itself has taken on an ever greater role on the world stage, so has Huawei. It is now the world’s largest provider of telecoms equipment.

The firm’s founder Ren Zhengfei, a former People’s Liberation Army officer, started Huawei in 1987. It’s based in Shenzhen, Guangdong and is officially owned by its 180,000 employees.

So is Huawei a security threat?

The US points to Mr Zhengfei’s ties to the military, and its growing global role to argue it represents a security risk.

In principle, controlling the technology that sits at the heart of vital communications networks gives the firm the capacity to conduct espionage or disrupt communications during any future dispute, particularly as more things, from autonomous vehicles to domestic appliances become internet-linked. Countries using Huawei equipment monitor such risks carefully.

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Ren Zhengfei, Huawei’s founder, took the company from equipment reseller to world leader in telecoms technology

But the US also points more generally to China’s National Intelligence Law passed in 2017 which says that organisations must “support, co-operate with and collaborate in national intelligence work”.

As a result, the US, Australia and New Zealand have all blocked local firms from using Huawei to provide the technology for soon-to-be rolled out 5G mobile networks.

That’s three of the five so-called “Five Eyes” intelligence sharing community. A fourth, Canada is reviewing its relationship with the firm.

The UK has not taken a position, although it is also coming under pressure from the US to do so.

Why hasn’t the UK blocked Huawei?

The UK government has admitted to “strains” in the relationship with Huawei. The body tasked with overseeing the security of the country’s mobile network, the National Cybersecurity Centre, has asked Huawei to fix problems that pose “new risks” to the network.

Moreover, Alex Younger, the head of the UK’s intelligence service MI6, has suggested that “some decisions” lie ahead over Huawei’s role because the roll out of 5G will make it harder to monitor security.

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Huawei offices in New Zealand, one of the nations citing national security concerns

BT has announced it is in the process of removing Huawei’s equipment from the core of its existing 3G and 4G mobile operations and won’t use the Chinese company in central parts of the next 5G network.

But Huawei has been providing technology to UK firms for more than a decade and Britain is keen to maintain a good relationship with China on trade and investment as it prepares for Brexit.

Most of the country’s mobile networks – Vodafone, EE and Three – have already been working with Huawei to prepare their 5G offerings and it might not be easy to change that at short notice.

What does Huawei say?

The company is keen to portray itself as a private company, owned by its employees, with no ties to the Chinese government beyond those of a law-abiding taxpayer. It says it prioritises safety and security when supplying technology and that at least some of the hostility towards it is because the firm poses a threat from a competitive point of view.

In the past the Chinese government has also argued that moves to block the firm’s products amount to “protectionism” and “discriminatory practices”.

The new hostility towards Huawei comes against a backdrop of heightened tension between the US and China, with President Trump accusing Beijing of unfair trade practices and of facilitating the theft of intellectual property from US firms.

Furthermore as several countries simultaneously plan to introduce faster 5G networks, the stakes are high for firms that win contracts.

Emily Taylor at Chatham House said there was a “standards war” going on behind the scenes.

“I think the trade advantage from setting standards that favour your own domestic suppliers’ technologies also plays a part in this,” she told the BBC.

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