China's technology challenge is bigger than just Huawei, British spymaster says

By Guy Faulconbridge

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LONDON (Reuters) - The West needs to understand that the challenge of China's technological revolution runs much deeper than Huawei's row with the United States over intellectual property theft and state espionage, one of Britain's top spies said.

Huawei, the world's biggest producer of telecoms equipment, is under intense scrutiny after the United States told allies not to use its technology because of fears it could be a vehicle for Chinese spy operations.

Jeremy Fleming, the head of Britain’s Government Communications Headquarters (GCHQ), said the incredible rate of technological change was unleashing unprecedented uncertainty, instability and risk.

"The strategic challenge of China's place in the era of globalised technology is much bigger than just one telecommunications equipment company," Fleming, one of Britain's top three spies, said in Singapore.

"It’s a first order strategic challenge for us all," he said. "We have to understand the opportunities and threats from China's technological offer."

GCHQ is Britain's main eavesdropping agency and has a close relationship with the U.S. National Security Agency as well as with the eavesdropping agencies of Australia, Canada and New Zealand in a consortium called "Five Eyes".

In what some have compared to the Cold War arms race, the United States is worried that 5G dominance would give any global competitor such as China an advantage Washington is not ready to accept.

5G, which will offer much faster data speeds and become the foundation stone of many industries and networks, is a revolutionary technology, Fleming said.

"5G is going to be one of the most important and impactful technologies of this or any era," he said, adding that he wanted a diverse supplier market.

"A market consolidated to such an extent that there are only a tiny number of viable options will not make for good cyber security. That's regardless of whether those options are Western, Chinese, or from somewhere else," Fleming said.

Huawei Chairman Guo Ping on Sunday reiterated his company's position that it has never and would never allow any country to spy through its equipment.

Guo said the United States did not represent the whole world and called for equipment makers, network operators and governments to work together to devise trustworthy standards to manage cyber security risks.