Europe has become the key battleground in the United States’ confrontation with China, attempting to keep equipment of Huawei Technology and ZTE from being integrated into more parts of the world. The frosty relationship with China has all the makings of a cold war replete with espionage, aggression behind the scenes and the drive for world domination.
Besides having some of the best equipment on the market, Huawei has been successful because its equipment is half the price of other manufacturers. Its labor is inexpensive so hundreds of engineers can be tapped to solve technical problems. The Wall Street Journal noted that it is proving to be a “tough sell” for the United States to get European allies to give up the Chinese telecom gear.
Most recently, the United Kingdom has refused to completely ban Huawei equipment from its networks, according to a report in the Financial Times. The UK officials said their security people can handle the threat through testing in special laboratories. On the other hand, London-based Vodafone has responded to the U.S. political pressure by temporarily halting its Huawei purchases.
A source with firsthand knowledge of communications equipment does not agree with the UK security assessment, saying the security hazard represented by Huawei is not a static risk, but a continuous, volatile threat that changes on a daily basis.
Germany appears to be still on the fence. France is considering putting Huawei equipment on its “high-alert” list. Last December, the Czech Republic’s cybersecurity agency issued security warnings against Huawei’s equipment and was slapped with a lawsuit.
It is feared that Huawei is capable of installing backdoors in its wireless networks that can funnel information back to Beijing. And the Chinese appear quite willing to harvest that information. A few years ago, in one of its five-year plans, the Chinese government openly admitted that it wanted to dominate the world’s telecom equipment supply, and it would support its companies to do that. Not coincidently, the Chinese government funds Huawei and ZTE.
Japan, New Zealand and Australia are all in the win column for the United States, with their own Huawei bans, but the $100 billion company has gear installed across Africa, South America, Russia and the Middle East. Additionally, India, which represents a huge market, has reversed its earlier position, saying it won’t ban Huawei 5G equipment, according to the Economic Times.
Interestingly enough, U.S. carriers are not restricted from using Huawei and ZTE equipment. but the White House is working to rectify that, drafting an executive order to be released soon. A bill passed by Congress in August 2018 restricted U.S. government contractors from using the Huawei and ZTE technology.
Huawei recognized several years ago that it was not making headway into the Tier-one wireless U.S. carriers, so it decided to sell telecom equipment to the U.S. enterprise market and regional telecom carriers. That portal allowed them to penetrate the U.S. network. Rural U.S. carriers stand to lose millions of dollars of infrastructure investment, if they have to give up their Huawei equipment.
Those who speak out against the ban against Huawei say that there is no evidence of spyware or hidden backdoors, but a corporate reputation report using open source information shows a company mired in allegations of illegal and improper activities. From 2003-2014, Huawei was involved in 11 civil lawsuits over intellectual property rights. The company has also been accused of tax evasion, anticompetitive behavior, bribery and labor violations in 38 countries. Perhaps most chilling, the company has been accused of helping multiple governments monitor and censor their citizens.
The U.S. Department of Justice has charged Huawei with stealing technology from T-Mobile. Additionally, the manufacturer, its chief financial officer and two affiliates were charged with violating U.S., European Union and United Nations sanctions against Iran. Canadian authorities later arrested Meng Wanshou, Huawei’s CFO, and she is awaiting extradition to the United States.
When a Chinese court gave Canadian Robert Schellenberg a death sentence possibly in retaliation for the arrest of Wanshou, Richard Fadden, a former national security adviser to the Canadian prime minister, wrote about the ban of Huawei 5G networks in an editorial in the Globe and Mail.
“If China would resort to putting Canadians to death to defend its corporate national champion, what might it do if the Chinese Communist Party had unfettered access to Canada’s vital communications networks?” he wrote. “The ambassador and the Chinese government have implicitly acknowledged the strategic importance of Huawei, and they have revealed how quickly the Chinese charm offensive in Canada can switch to aggression and bullying.”