Top 5 reasons why everyone is worried about Huawei

With Huawei struggling to secure 5G contracts overseas, concerns over the firm’s closeness to China’s ruling Communist Party are far from unfounded

While concerns relating to Huawei could ultimately reflect little more than Western insecurities about the rise of China as a global superpower, there is evidence that the fears surrounding the firm are not completely without merit

Huawei is not like other smartphone manufacturers – at least, it isn’t treated like them. News that the company may be asked to build 5G infrastructure in a number of countries has been met with a mixture of suspicion and outrage. The Trump administration has gone as far as suggesting that governments using Huawei’s technology will have only limited access to US intelligence sharing in the future.

While concerns relating to Huawei could ultimately reflect little more than Western insecurities about the rise of China as a global superpower, there is evidence that the fears surrounding the firm are not completely without merit. The New Economy takes a look at five of the main reasons why Huawei is currently under so much scrutiny.

Communist connections
Ren Zhengfei founded Huawei in 1987 but before the billionaire made his name as the leader of the world’s second-biggest smartphone manufacturer by market share, he worked as an engineer in China’s People’s Liberation Army (PLA).

Much of the criticism levelled at Huawei stems from the belief that it will share confidential information with the Chinese Government

It is this connection to the country’s ruling Communist Party – the PLA is controlled by the party’s Central Military Commission – that has led many to claim that Huawei has close ties to China’s political leaders. The company, meanwhile, insists that it is fully independent of the Chinese state and has asked that the accusations made by its many critics be supported by evidence, not speculation.

The 5G threat
Away from smartphones, Huawei is also the world’s biggest supplier of telecoms equipment, leading many companies to consider partnering with the firm to manufacture their 5G networks. This, however, comes with significant risks.

As 5G technologies are rolled out, they are likely to usher in new forms of software, more internet-connected devices and result in much more data being created and shared. This means that any organisation managing this network could potentially have access to a wealth of highly sensitive information. So far, a number of governments, including the US, Australia and New Zealand, have decided they do not want Huawei to be that organisation.

Not the first time
Much of the criticism levelled at Huawei stems from the belief that it will share confidential information – either from the public or private sector – with the Chinese Government. While those claims are largely unfounded, they are not completely outlandish. In 2003, Cisco filed a lawsuit against the Chinese firm, accusing it of stealing software code, settling the case confidentially a year later.

Last year, a Texas jury found Huawei guilty of patent infringement and ordered it to pay $10m in damages to US firm PanOptis. Other legal cases involving the company are not hard to find, suggesting that Huawei does not always operate entirely above board.

Compelled by law?
Huawei can claim as much independence as it wants; the company may have little choice but to comply with the demands of the Chinese Government. In 2017, a national intelligence law was passed stating that domestic firms are obliged to “support, co-operate with and collaborate in national intelligence work”.

Although Huawei has responded with a 37-page legal opinion arguing that intelligence gathering does not apply to its overseas business, not everyone is convinced. Certainly, the 2017 law is vague enough in its wording to cause concern for international governments.

Chinese whispers
China is far from the only country that could be accused of espionage, either concerning its own citizens or those based overseas. However, there is a perception, in the West at least, that it is a nation not to be trusted.

Over the years, Chinese hackers have targeted a number of foreign businesses, particularly defence firms, with the intention of stealing intellectual property. In fact, it’s believed that these efforts have helped the country to close the technology gap between itself and the US. With China determined to become the dominant global superpower – economically, technologically and militarily – gathering information from its rivals will prove vital. If Huawei was chosen to build 5G networks abroad, it would certainly have the means to help on that front.

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