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Chinese Telecom equipment company Huawei Consumer Products division CEO Richard Yu gestures as he speaks on stage during the presentation the new P30 smart-phone, in Paris, March 26, 2019. VOA

The U.S. government’s multi-pronged effort to persuade European allies to bar the Chinese firm Huawei from supplying key elements of state-of-the-art 5G mobile data networks appears to have foundered, raising questions not only about the future of key intelligence-sharing relationships but also about the future of mobile technology in the U.S. itself.

U.S. officials used warnings of potential “backdoor” technology that could give Chinese intelligence services access to critical telecommunications infrastructure to try to warn allies away from Huawei equipment. Secretary of State Mike Pompeo went as far as warning allies that the U.S. would have no choice but to restrict the information it shares with key allies.

In the end, the push appears to have been in vain. The EU announced Tuesday that it will allow carriers to move forward with the installation of Huawei equipment. Officials said EU countries’ sharing information about 5G security threats will be sufficient to safeguard their high-tech communication networks.

Some of the United States’ staunchest allies have made it plain that they do not see the Huawei threat as Washington does. Germany has announced that it will not ban the Chinese firm from its networks, and regulators in Britain have said that they are satisfied that any threat can be mitigated by inspection and monitoring.

Secretary of State Mike Pompeo answers a question during a news conference, March 26, 2019, at the Department of State in Washington. VOA

Last month, an effort to block Huawei from participating in the 5G rollout in France died in the Senate, and Italy has not only embraced Huawei, but has become the first European country to accept funding from Beijing as part of China’s “Belt and Road” program of infrastructure investment.

This is not to say that Europe is ignoring potential security threats from Huawei. On March 12, the European Parliament passed a new Cybersecurity Act, creating standards for telecommunications equipment. While it did not single out Chinese firms, the language of the new law makes it clear that equipment from companies located in countries that pose potential security threats will receive extra attention.

On Tuesday, the EU’s digital chief said EU countries will have until the end of June to assess cybersecurity risks related to 5G, leading to a bloc-wide assessment by October. In the Pacific, U.S. allies in closer proximity to China have been more aggressive in taking action against Huawei. The governments of both Australia and New Zealand have already barred their domestic carriers from using Huawei equipment in their 5G networks.

Washington’s inability to create consensus among its allies on such a critical issue has puzzled many experts. Key sectors of the U.S. intelligence community identified Huawei as a major national security concern at least a decade ago. However, the concerted effort to go public with concerns about allowing the company to participate in the rollout of 5G technology only came to the fore within the past year — long after many say such conversations ought to have taken place.

“It is late in the game,” said Paul Triolo, practice head for Geo-Technology at the Eurasia Group and China Digital Economy Fellow at the New America Foundation. “I was in Europe last week and I had a German official say, ‘Gosh, I wish we’d had this debate three years ago.’ That’s the problem. The industry has moved in this direction in lockstep for the past seven or eight years and now, you’re throwing, from the sidelines, a big smoke bomb.”

EU’s digital chief said EU countries will have until the end of June to assess cybersecurity risks related to 5G, leading to a bloc-wide assessment by October. VOA

Industry insiders in Europe reacted with a mix of incredulity and alarm to the U.S. proposals. Vodafone’s chief technology officer, Scott Petty, last week told the BBC that a ban on Huawei wouldn’t just be forward-looking. It would require tearing out the company’s equipment already incorporated into existing mobile networks. “The cost of doing that runs into the hundreds of millions and will dramatically affect our 5G business case,” he told the news service. “We would have to slow down the deployment of 5G very significantly.”

Concerns about Huawei

The rise of Huawei to global prominence, considered a major success story in China, has not come without controversy. The company has a documented history of industrial espionage, and benefits significantly from close connections to the Chinese government, which provides various subsidies generally unavailable to Huawei’s foreign competitors. There has also long been suspicion, bordering on certainty in some sectors, that the company cooperates with Chinese intelligence services.

“I mean they are clearly malicious actors — I don’t think there’s any doubt about this,” said Trae Stephens, a former U.S. intelligence officer, and a founder of Anduril Industries, which sells technology to the U.S. departments of Defense and Homeland Security. “The evidence has been presented over and over and over again. The intelligence community doesn’t make spurious accusations that have no backing.”

The certainty with which current and former U.S. officials accuse Huawei of being a pawn of Beijing makes the decision to wait until the last minute to try to block the firm from the 5G rollout hard to understand — especially given how long the company has been on the intelligence community’s radar.

A man is silhouetted as he walks by a Huawei retail store at a shopping mall in Beijing, China, Dec. 11, 2018. VOA

At least as early as the first years of the Obama administration, officials were expressing concern about allowing Huawei to provide sensitive infrastructure to the U.S. telecommunications industry. By 2012, that had hardened into specific warnings.

The House Permanent Select Committee on Intelligence in 2012 completed a year-long investigation into Huawei and ZTE, a smaller Chinese telecom firm, and left no doubt about its members concerns. Among other things, the investigation concluded that “the risks associated with Huawei’s and ZTE’s provision of equipment to U.S. critical infrastructure could undermine core U.S. national-security interests.”

However, in the intervening years, one thing the U.S. never did was present clear and convincing evidence that Huawei was conspiring with the Chinese government in terms of ongoing espionage.

Even after the Chinese legislature passed a new law requiring companies operating in the country to cooperate, if asked, with intelligence-collecting agencies, warnings from the U.S. were all prospective — claims about what Huawei might do in the future, rather than evidence of actual espionage.

Fractured 5G future

While the late push by the U.S. to keep Huawei out of the rollout of 5G worldwide may have failed, years of warnings about doing business with the company have not gone unheeded in the United States. While Huawei equipment is not officially banned in the U.S., the 2012 report from the House Intelligence committee got the attention of domestic carriers, and Huawei has been all but shut out of the market.

A law signed by President Donald Trump last year blocking government agencies from purchasing any equipment from the company only made it more difficult for the firm to play in the U.S. market.

A banner of the 5G network is displayed during the Mobile World Congress wireless show, in Barcelona, Spain, Feb. 25, 2019. VOA

However, even without access to U.S. markets, Huawei remains the largest provider of telecommunications infrastructure equipment in the world. It also spends lavishly on research and development: It’s R&D budget was nearly $14 billion in 2017, more than twice as much as either of the two other major 5G players, Ericsson and Nokia, spent that year.

The combination of these two factors means that Huawei products are not only being used worldwide, but that they are often the most advanced and innovative equipment available.

Huawei, according to Paul Triolo of the Eurasia Group, is the “most competitive, lowest-cost, high performance, high-service and, critically, high-innovation” company in the mobile telecommunications infrastructure market.

This has some experts concerned about a future in which the U.S. walls itself off from the technology that the rest of the world is adopting.

ALSO READ: Public Concern Over Data Privacy Pushes Tech Giants to Change their Way

Lester Ross, the partner-in-charge of the WilmerHale law firm’s Beijing office, said he believes the U.S. effort to stymie Huawei in Europe and at home will only “intensify” the company’s drive to expand to other countries around the world.

“So if the United States and perhaps a few other countries are just left then to be islands in an ocean of Chinese-led telecommunications infrastructure, what implications does that have for the world?” he asked. (VOA)


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