Huawei, one of the world’s largest and most powerful telecommunications conglomerates, has had a difficult two months, facing a new wave of arrests and enforcement actions in countries in Europe and North America. In January, the Polish authorities arrested Piotr Durbajlo and Weijing “Stanislaw” Wang on charges of espionage on behalf of China. Wang, a Chinese national, was a sales director at Huawei (he has since been fired by the company), while Durbajlo is a former member of the Polish domestic counterintelligence agency and a former telecommunications advisor to Prime Minister Beata Szydlo. Durbajlo was well integrated into the senior levels of the Polish government, and even designed the special smartphones used by senior officials.
Such developments have added to suspicions that Huawei, a jewel in the crown of the China’s growing technology industry cannot be trusted in its protestations that it does not cooperate with the country’s intelligence agencies, or that it respects the rule of law and the intellectual property of its competitors.
Huawei’s trustworthiness in these respects matters. If it is lying about cooperation with Chinese intelligence, its capabilities could endanger the data security and privacy rights of Western democratic countries, potentially giving China the tools to corrupt politicians and to improperly influence Western policymaking in the West at the highest levels. If in its actions it habitually undermines rule of law and intellectual property, it could erode the foundations of honesty and transparency that free, fair markets depend on. If the company wants to continue growing its market share in Western countries, their leaders must be able to trust its assurances. The balance of evidence, including the events of the past two months, indicate that they probably cannot.
Huawei in Europe: Too Sweet a Deal?
Founded in 1988 by its president, Ren Zhengfei, as a supplier of phone switches, Huawei has grown into a global telecommunications company, offering mobile broadband devices, network equipment, mobile phone handsets, and convergence devices in over a hundred countries. It is ostensibly owned by its employees, and Ren himself directly holds a 1.4 percent stake in the company. This communal ownership scheme belies Huawei’s close connections with China’s military and security apparatus, with which it has partnered since its founding. It has come under international scrutiny in the last few years over its relationship with the government and the potential for its equipment and services to provide a back door to the intelligence services. The United States, Australia, New Zealand, and Norway have all taken steps to prevent Huawei’s further penetration into their domestic markets. The United States has also warned its allies against the use of telecommunications technology originating with Chinese firms.
Many other European countries have, however, welcomed Huawei into their domestic markets, or have at least done little to prevent it from entering. Germany, the Czech Republic, and Poland exhibited a laissez-faire attitude toward the company in recent years. The Huawei affair in Poland, as well as other similar controversies around the world, such as a 2015 incident in which the German cybersecurity firm G Data found malware that stole information and tracked users pre-installed on phones produced by Huawei and Xiaomi, another Chinese company, should serve as a wake-up call to European leaders concerning Huawei’s potential for use in Chinese intelligence gathering and other malign interference, despite the company’s assertions to the contrary.
There is a debate as to the nature and extent of Huawei’s relationship to the Chinese state, which has clouded the company’s reputation abroad in recent years, with suspicion heightened by the company’s history of proximity to China-related data leaks. For example, last year an investigation by Le Monde revealed that in 2017 African Union officials discovered that data from the organization’s headquarters in Addis Ababa was being transmitted secretly to servers in Shanghai. Huawei, which had provided most of the headquarters’ ICT infrastructure as a gift from the people of the China, denied any wrongdoing, and there has been no formal connection between the data theft and the Chinese government. However, the incident did little to assuage concerns on the part of the United States and other countries concerning the security of data handled by Huawei and its equipment.
These suspicions did not stop many European countries from welcoming Huawei into their domestic telecommunications market. The company has also worked hard to sweeten the deal, donating to well-placed charities like the Prince’s Trust in the United Kingdom, sponsoring the party convention of Germany’s ruling Christian Democratic Union, and funding research institutes across the continent. Germany’s Federal Office for Information Security made it known last December that Huawei would be welcome to put in a bid in the 2019 auction to build the country’s 5G network. Vodafone and Huawei demoed 5G in the Czech city of Karlovy Vary in the summer of 2018. Even in Poland, Orange was partnering with Huawei on introducing 5G, with Huawei’s Poland director calling the country key to its European expansion strategy.
Although the situation has shifted somewhat amid the fallout from the arrests of Durbajlo and Wang, the revelation of a potential Chinese mole being found in the office of Poland’s prime minister has not made nearly the impact on European policymakers that one might expect. In the Czech Republic, President Milos Zeman, who has a history of pro-China advocacy and questionable connections to important Chinese officials, has continued to advocate for Huawei, using the specter of economic retaliation against the country to undermine the findings of his country’s intelligence services, which issued a formal warning last December that the products Huawei and ZTE (another Chinese telecom company) products should not be used in government operations or in industries essential to the function of the state. Huawei was recently excluded from a tender to build a taxpayer portal. The prime minister of Slovakia, Peter Pellegrini, has been similarly hesitant to name Huawei a security risk or take any step to bar its entry into the country’s market, saying that he has no evidence they pose a security risk.
The German and Polish governments have taken more action with regard to Huawei. The former is reexamining its position on the company’s participation in this year’s 5G auction, although Deutsche Telekom has expressed hesitation to remove it from its network, saying that doing so would set 5G implementation back two to three years. Poland is turning to its NATO and EU partners to formulate a bloc-wide solution to possible Chinese espionage. Meanwhile, the European Commission is considering banning Huawei from the construction of European 5G networks and other sensitive infrastructure.
This is not enough, however. Despite Huawei’s statements that nothing in Chinese law requires it to spy on behalf of the state, Article 7 of the country’s National Intelligence Law and Article 22 of its Counterespionage Law require any Chinese organization or citizen to aid the security apparatus in its national intelligence and counter-intelligence work. Allowing Huawei and similar Chinese companies ground-floor access to the EU’s telecommunications infrastructure, including sensitive government infrastructure, would leave the door wide open to potential espionage activity and corporate malfeasance in Europe, and would leave NATO vulnerable to attack by China via the network systems of its member states.
European governments should exclude Huawei from their telecommunications infrastructure before the company becomes too enmeshed in the continent’s 5G systems to be fully, securely, and painlessly removed at a later date. Failure to do so would give China truly unprecedented tools to corrupt, influence, and subvert Western democracies and the rule of law that is so vital to their continued health and the health of the post-War international system.
The views expressed in GMF publications and commentary are the views of the author alone.