Donald Trump, 5G data, Chinese intelligence: what exactly is going on at Huawei?
Banned in the USA and under investigation by The Five Eyes – the scandal at Huawei is exposing deep-rooted suspicions between East and West.
This article was originally published on 10 July 2019. Since then parts of the Huawei story have developed. Perhaps most significantly, the UK government has recently decided that it will continue to allow components created by Chinese telecoms giant Huawei to be used in the UK’s growing 5G network — but with restrictions.
This comes after sustained pressure from the USA who have long argued that Huawei’s equipment poses a spying threat. Basically, the worry is that using Huawei components may mean that the Chinese government has access to our 5G network – which once it is rolled out, will help control everything from our smartphones to our national grid. Earlier today, however, the US Secretary of State Mike Pompeo said that the USA would help the UK to minimise any surveillance risks and that intelligence sharing would continue.
Find out more about the background to this story here…
There seems to be a lot going on with Huawei…
Yep. Many major western powers are wrangling over whether the Chinese telecom giant should be used to provide network equipment which will support the rollout of broadband game-changer 5G – the fifth generation of mobile internet set to make such phenomena as autonomous cars and smart cities a reality.
And in the meantime, the company’s CFO and eldest daughter of Huawei’s founder, Meng Wanzhou, has been arrested in Canada on charges of committing and conspiring to commit bank and wire fraud. The UK former defence secretary Gavin Williamson, lost his job after allegedly leaking information from a meeting of the National Security Council where they discussed Huawei (something he strongly denies). And the Five Eyes – an international intelligence agency made up of some of the world’s biggest powers (including the UK) – are deeply divided on whether they should be allowed to be part of western networks.
Well according to them, Huawei is a ‘leading global information and communications technology solutions provider’. (Catchy).
They’re the world’s largest telecom equipment manufacturer and the second largest maker of smartphones. They’re a massive global company with nearly 200,000 employees, operating in 170 countries and districts and serving around three billion people. They’re also one of only three major companies in the world who can provide the services and goods needed for 5G roll-out. So in theory, yes.
In practice, it’s a lot more complicated.
In 2017, China issued a National Intelligence Law obliging all organisations to co-operate with state intelligence work on demand. This means that, theoretically, Huawei could be forced – by law – to provide the Chinese government with information should they require it.
According to the US this means they are compromised. If used to deliver 5G to the west they could be forced by the Chinese authorities to hand over data and provide hidden backdoors to western networks enabling China to spy on western nations.
That doesn’t sound good…
No, it doesn’t. But all of this is strongly contested by Huawei. They issued a 37-page legal document to the US Federal Communications Commission detailing why. The bottom line of their argument is: “Huawei’s subsidiaries and employees outside of China are not subject to the territorial jurisdiction of the National Intelligence Law”.
Huawei argues that they are a private company, neither controlled nor influenced by the Chinese government.
But then why would the US make such a big deal out of it?
Some argue that the US is using Huawei as a bargaining chip to secure its trade deal with China. The US feels threatened and so are trying to prevent what Huawei has called ‘fair competition’ in the technological sphere.
Right. But I thought I read something quite damning in The Times recently?
Back in April, the newspaper ran an article claiming that the American secret intelligence service – the CIA, has reason to believe that Huawei has received funding from Chinese state intelligence services including the People’s Liberation Army (PLA), China’s National Security Commission and a third branch. As The Times piece explained: “After US agencies tracked the funding for Huawei, Washington decided that it was too risky to do business with the company, the source said.”
Well, as the company said: “Huawei does not comment on unsubstantiated allegations backed up by zero evidence from anonymous sources.”
And that’s the heart of the issue. No evidence has ever been found to support allegations that Huawei has participated in subterfuge. And the allegations have been investigated. A lot.
Who’re The Five Eyes?
The Five Eyes are an intelligence alliance, made up of the US, the UK, Canada, Australia and New Zealand. And even they are split on the matter. The US is attempting to strong-arm the others into boycotting the Chinese firm.
Who has actually banned Huawei?
First up, the USA. On 15th May 2019, President Donald Trump issued a national security order which effectively banned US companies from using telecoms equipment which poses an ‘unacceptable risk to the national security of the United States’. No names were mentioned – however later that day, the Commerce Department announced Huawei had been one of the companies added to its ‘Entity List’, forbidding US companies from conducting business with it without a government waiver.
But the story is ever changing. Just yesterday US Commerce Secretary Wilbur Ross made an announcement during a department conference that US companies who want to supply Huawei will be allowed to be apply for a licence to do so but that licences will only be granted if, as TechCrunch reported, “they can demonstrate that the technology they sell to Huawei will not put national security at risk.” In practice, the company remains blacklisted.
So that’s why people with Huawei phones can’t use their apps?
Pretty much. Google, as a US-based company, cannot provide goods and services to Huawei, and so in May announced that they would be blocking Huawei’s access to the Android software that it needs to run.
OK, anyone else?
Yes, then there’s Australia. They banned mobile carriers from using Huawei to build 5G networks last August. In a statement, the Government explained how telecom operators had traditionally separated network equipment into two networks: ‘core’ and ‘edge’. The former deals with the most sensitive functions, like authentication and billing, whilst the latter deals with the equipment capturing radio signals (like antennae) enabling user products – e.g. handsets – to wirelessly connect to the core.
Historically, there was a clear divide between the two. With 5G, they will move closer together – or so the Australian government allege. They say this poses a security risk, providing opportunity ‘to circumvent traditional security controls by exploiting equipment in the edge of the network’. In a carefully worded conclusion, they surmised that the involvement of ‘vendors who are likely to be subject to extrajudicial directions from a foreign government’ – no names mentioned, of course – conflict with Australian law and could prevent the proper protection of a 5G network.
New Zealand is still assessing the risks posed by Huawei, and have banned networks from using it until they reach a decision. And Canada has yet to decide one way or the other.
And the UK?
The UK doesn’t agree with a ban. Whilst the general consensus is ‘no’ to using Huawei for core networks – and government ones too – some experts believe there is only small risk in using its radio access network equipment.
Why would we take any risk at all?
Well, there aren’t many companies selling the type of gear required to facilitate 5G. Other than Huawei, the main contenders are Ericsson and Nokia. Since the safest networks are built using multiple suppliers – to prevent one ‘vendor-specific vulnerability’ bringing down the entire network – by shunning Huawei, you are reducing your supplier list and arguably making the resulting network less dependable and robust anyway. Huawei’s equipment is also considered of better quality than that of its rivals, plus it’s cheaper.
Beyond that, experts argue there is no need for the boundaries between core and edge networks to blur, as long as they are upheld by mobile networks. Plus, cyber attacks have historically occurred on account of flaws in software coding, which come down to plain, old human error and could affect any telecoms company.
I thought the UK had already agreed Huawei will be used to facilitate 5G networks?
Where did you hear that?
A little bird told us…
Oh. You mean that National Security Council leak. The one blamed on former defence secretary Gavin Williamson – better known as The Man Who Once Told Russia To ‘Go Away And Shut Up’. He was sacked. And regarding the UK’s decision, nothing has been finalised.
So basically, no one agrees?
Exactly. And this lack of consensus has created friction between the Eyes. “It would be very difficult for the United States to share information the way that we have in the past if we are having to rely on unsecured networks,” US State Department’s Ambassador Robert Strayer told the BBC.
And what’s all that stuff about the CFO getting arrested? Seems dodgy…
Yeah, it does a bit. Meng Wanzhou, Ren Zhengfei’s eldest daughter, is Huawei’s CFO. She was arrested in Canada in December last year, on the request of the US government, for allegedly violating US trade sanctions on Iran.
She is charged with committing, and conspiring to commit, bank and wire fraud. She is accused of misleading banks between 2009 and 2014 over Huawei’s relationship with Skycom – a purported ‘unofficial subsidiary’ of Huawei, conducting business in Iran – in order to acquire their services.
She is currently under house arrest, battling extradition to the US. Her hearing has been set for 20th January 2020.
So what is Huawei doing to make itself look less, well, dodgy?
Huawei says they are very transparent. In 2010, they even set up an office in Oxfordshire specifically tasked with looking into security risks their own company may pose to the UK. It’s called the Huawei Cyber Security Evaluation Centre.
Isn’t it known as ‘The Cell’?
A bit Hollywood sci-fi, but yes. The work conducted in it is overseen by GCHQ, the Cabinet Office and the Home Office, which should make its findings pretty trustworthy. Only their staff are partially made up of Huawei employees, which some say presents a conflict of interest.
To keep it in check, The Cell’s operation is annually assessed by an Oversight Board. Their most recent audit found the organisation’s ability to operate independently of Huawei HQ produced no ‘high or medium priority findings’.
It also stated ‘significant technical issues’ had been identified in Huawei’s engineering processes. Whilst it emphasised it didn’t believe these were on account of Chinese state interference – saying instead they were the result of bad engineering and ‘cybersecurity hygiene’, which can be managed – the annual report concluded only ‘limited assurance’ could be provided that all risks posed to the UK’s national security, on account of Huawei’s involvement in its ‘critical networks’, could be ‘sufficiently mitigated long-term’.
What’s The Cell like?
Can’t get passed that Hollywood image? Sorry to disappoint but it’s just a ‘humdrum office block’ according to this report – though, one where visitors have to leave their phones at the door on arrival.
Ok, well, what about that new Huawei campus in China? Isn’t that a theme park?!
No. But it is kind of extraordinary. Huawei’s HQ in the southeastern Chinese region of Shenzhen has recently been expanded to include an outer city campus, which is made up of a number of replica European cities. Paris and Verona in China? Sure.
Home to 30,000 employees, the campus consists of buildings designed in European style. Why? Apparently, Huawei founder Ren Zhengfei is a fan of classical architecture.
So, in summary, what’s going to happen?
Hard to say. It’s possible Britain will use Huawei gear for parts of its edge networks – but it’s just as possible it won’t. The US could do a u‑turn on Huawei entirely, in order to negotiate a better trade deal with China – that’s a possibility, too.
As President Trump confusingly said at a press conference in May: “Huawei is something that’s very dangerous. You look at what they’ve done from a security standpoint, from a military standpoint, it’s very dangerous. So, it’s possible that Huawei even would be included in some kind of a trade deal. If we made a deal, I could imagine Huawei being possibly included in some form, some part of a trade deal.”
With this particular US President, anything is possible. Best sit tight and watch this space.