by Zak Doffman
In the battle between Washington and Huawei, there has long been the taunt from Shenzhen that U.S. officials have failed to produce any evidence of actual collusion between the telecom equipment giant and the Chinese state. Has that now changed?
On Saturday, the Times reported that such evidence exists, it has just not been openly published. According to the newspaper’s U.K. source, Huawei “has received funding from branches of Beijing’s state security apparatus… American intelligence shown to Britain says that Huawei has taken money from the People’s Liberation Army, China’s National Security Commission and a third branch of the Chinese state intelligence network.”
Earlier this month, Joy Tan, Huawei’s chief global communicator, told me that “the assumption that the Chinese government can potentially interfere in Huawei’s business operation is completely not true. Huawei is a private company. The Chinese government does not have any ownership or any interference in our business operations.”
The CIA has now directly refuted this. If true, the equipment maker taking funding from the Chinese military and state security machine would explode every defense offered through this long-running campaign to protest their innocence.
The first substantive allegations?
It has always been clear that Washington expected a different level of collaboration from its closest ‘Five Eyes’ allies than its broader sets of friends, and the Times claims that “the U.S. shared the claims with Britain and its other partners in the Five Eyes intelligence alliance — Australia, New Zealand and Canada — earlier this year.”
When I spoke with her, Tan insisted that “China does not have any law to force any company or business to install a back door. Premier Li Keqiang said that openly several weeks ago, the Chinese government would never do that, make any company spy.”
But, self-evidently, funding from defense and intelligence agencies comes with strings attached. And so this latest news might explain the apparent change of heart by the U.K. The country was strongly expected to opt for a risk mitigation approach, accepting the realities of Huawei in its 5G infrastructure. But the annual report into Huawei’s cybersecurity morphed from a risk mitigation strategy to claims that such an approach might not work long-term, surprising everyone, not least Huawei. The U.K.’s Huawei Cyber Security Evaluation Centre (HCSEC) Oversight Board said that it “continued to identify concerning issues in Huawei’s approach to software development bringing significantly increased risk to U.K. operators.”
The implication was that the U.K.’s spy agency, who explained that they “can only provide limited assurance that all risks to U.K. national security from Huawei’s involvement in the UK’s critical networks can be sufficiently mitigated long-term,” would likely want the equipment prohibited or seriously limited. The country’s networks, as elsewhere, do not. It will add months or years of delays to deployments and incur material overspend.
Last month, the U.S. Principal Deputy Director of National Intelligence said in reference to the Huawei situation, “we are going to have to figure out a way in a 5G world that we’re able to manage the risks in a diverse network that includes technology that we can’t trust. You have to presume a dirty network.”
The implication was that U.S. intelligence had accepted that risk mitigation is the best they will get, and this looked to be confirmed with official news from Germany’s telecoms regulator that the U.S. had accepted security testing as an alternative to a Huawei ban. It now seems that there are multiple layers of security envisaged depending on the country involved, and that will likely influence what intelligence is shared or withheld.
Huawei has always denied any claims of funding from Beijing or working to aid the objectives of China’s state intelligence apparatus, and so this could be the most serious allegation yet leveled against the company.
Huawei was approached for any comments on this story.
The U.K. prepares to decide
U.K. lawmakers, including Prime Minister Theresa May, are expected to debate Huawei at the country’s National Security Council in the coming days. Senior politicians are split as to how best to proceed. There are senior politicians who want to go as far as an outright ban and others who have dismissed the concerns as rumor and gossip and take the 5G trade and innovation line.
According to the Times source, “only the most senior U.K. officials are believed to have seen the intelligence, which the CIA awarded a strong but not cast-iron classification of certainty.” But the newspaper also reports a separate U.S. course as saying that there is a view within the U.S. intelligence community that “the Chinese ministry of state security — its principal security and espionage organization — had approved government funding for Huawei.”
Only limited information will be made available to politicians, and so the timing of this news ‘leaking’ is helpful to those seeking sanctions. If the U.K. does follow the U.S. request to prohibit Huawei, that will mean a much more robust wall around Five Eyes intelligence sharing. It would also put a Huawei free zone at the heart of Europe, if not the EU, and it would likely set back U.K. 5G deployment plans and trigger additional costs running to billions of pounds.
But if Huawei is genuinely taking funding from the Chinese military, there will be no alternative. The U.K.’s view on the authenticity of the CIA material will become clear when we see the political direction the government elects to take.
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