The 5G Battleground - What's really happening between China Huawei and the west (1)

As 5G networks roll out all over the world, Huawei’s involvement, as well as its bans, come up again and again. The company seems to be dominating 5G-related headlines.

But why do people care if Huawei builds the 5G network infrastructure?

Why has the company been banned in several countries?

What’s all the fuss about?

The answers are actually a lot more complex than you may have guessed. The issues run far deeper than Huawei is spying on us, traversing into the realm of geopolitics, with various parties jostling for control and power.

To help you finally get your head around what’s really going on, we’ve created this in-depth guide that gets to the heart of the matter, helping you to understand the many factors at play.

What is 5G & why is it important?

Before we dive in too deeply, it’s important to talk about what 5G actually is, and why anyone cares about it. If you haven’t been following things too closely, all you may know is that 5G promises to bring faster mobile internet. This is certainly true, but it also offers:

  • Significantly lower latency (the time between data being sent and when it arrives).
  • Greater energy efficiency.
  • Increased capacity.

Taken together, these improvements are set to enhance our current technology and drive a host of new developments, including:

  • Much faster browsing experiences and video load times.
  • Smoother and higher quality video calls.
  • Better gameplay in online games.
  • A range of new features in both drones and autonomous vehicles.
  • Reduced motion sickness in virtual reality and augmented reality tech, as well as more powerful experiences.
  • A host of new IoT applications and the proliferation of IoT tech in everyday devices. These include a greater drive toward smart homes, smart cities and smart vehicles.
  • New provisions of remote healthcare, including monitoring and remote surgery.

With these and many more applications, pundits are predicting 5G to be one of the key technological drivers in the coming years.

The standard: 5G NR

As a technological innovation, 5G is a little more difficult to understand than something like a television or a car. 5G is simply the fifth generation of mobile network technologies, which has been standardized as 5G New Radio (5G NR), by a group called the 3rd Generation Partnership Project (3GPP).

3GPP was also behind 3G, from which it derives its name, as well as 4G. It’s made up of seven organizational partners that represent the telecommunications industry in different regions of the world, as well as a number of different market representation partners, which are mostly trade bodies that represent various groups in the wireless market.

Rather than actively researching and developing the technologies that make up 5G NR, 3GPP basically works like a committee, where its members – many of which are the companies that develop the technologies – collaborate to decide the parameters of the standard.

If a company is a member of one of the seven telecommunications industry groups that are organizational partners, then it can participate as an individual member in 3GPP if it pays the membership fees.

The 3GPP standards are established by a number of working groups that each focus on different aspects. These are made up of elected officials, who are generally representatives of telecommunications companies and other industry bodies.

Anyone who is a legitimate representative of an individual member of 3GPP can contribute to the releases that make up 5G NR. In practice, this often means that representatives of companies attend the various working groups and advocate for their particular technology to be included in the specification.

This means that the likes of Huawei, Nokia, Ericsson, Samsung, Qualcomm and many others are battling it out, hoping that they can persuade the members of working groups to approve their technologies over alternatives.

This involves a lot of compromises and horse-trading, as all of the companies want as much of the standard as possible to be comprised of their technology. Due to the politics and the fact that members often act in their own interests, the final product isn’t necessarily the best possible standard, but at least it’s something that everyone has agreed upon, however begrudgingly.

Why do we have standards like 5G NR in the first place?

Standards stipulate the technical criteria that must be met. One of the main advantages of a standard is that it allows interoperability between all parties that meet the standard. For a good example of why we need standards, let’s compare Apple’s iMessage and SMS.

iMessage is a proprietary protocol that can only be used between Apple devices like iPhones. In contrast, SMS is a standard that can send messages to and from any GSM device. While iMessage is useful for friends who also have Apple devices, it’s useless for talking to those on Android. If iMessage was your only option, you would be completely cut off from those people.

In a world without widely accepted standards, we would constantly have to deal with closed ecosystems like Apple’s iMessage, which would make it exceptionally difficult to interact with those who chose products from a different organization.

Thankfully, there are a range of widely used standards like SMS that allow people to communicate freely, even if their devices come from different manufacturers. This is why it’s so important for industry groups to be able to come together and decide on single standards that they will all commit to using.

Does a company or a country have to follow a standard?

Standards aren’t mandatory, and no one forces an organization to follow them. Often, they are simply created by industry bodies in an attempt to solve some of the compatibility issues mentioned above.

What happens if a company doesn’t follow a standard?

While there isn’t necessarily an entity that makes a party adhere to a certain standard, abiding by them can be beneficial, especially if the standard is widely accepted. If you were a mobile manufacturer who didn’t adhere to any existing communication standards, your devices would not be compatible with those developed by other companies.

Unless your devices had some kind of amazing advantage over the alternatives, it would be almost impossible to gain a foothold in the market, because consumers would prefer competitor devices that offered them greater functionality. In most cases, this would result in the failure of the company.

Can a company or country create its own standard?

Companies, countries and groups are free to create their own standards, and they often do so. They may do this simply because they want a standard that meets their own requirements rather than having to make compromises. Otherwise, they may develop a new standard in an attempt to take over an existing one.

A good example of this is the alternative 3G and 4G standards that were mainly developed by Chinese interests. Never heard of them? That’s because the vast majority of providers in other countries went with different standards, leaving China’s TD-SCDMA and LTE-TDD in relative isolation.

Why do companies participate in the 5G standard?

When it becomes clear that one standard will dominate the world, it is incredibly difficult to replace it with another. If a country or group of companies decide to attempt it anyway, they are likely to be left by themselves, rather than integrated into the technological paradigm of the rest of the world.

While China did start to make some progress with its own form of 4G, its standard was far from dominant. As China has learned from its previous experience, if it wants to be part of a global technological shift, it’s probably best to contribute to the dominant standard, rather than try to create another standard and face the uphill battle of international adoption.

Since 3GPP was behind the most successful mobile network standards of the past, and most of the industry was behind the organization, becoming heavily involved in the 5G NR standardization process was the best bet. This would enable Chinese companies to have a global influence, rather than simply being kings of their own isolated domain.

What benefits come from influencing a standard?

5G NR is comprised of specifications that allow cross-compatibility, as well as a vast number of technical innovations that make it significantly better than 4G.

As 3GPP doesn’t actively do the research and development itself, these innovations mainly come from the companies that make up its membership. But a company wouldn’t just give away its technology that it spent millions developing, especially when it has to pay membership fees just to have a seat at the table.

Instead, companies are compensated for the technologies that are approved for the 5G NR standard through licensing. When a certain company’s intellectual property is included in the standard, it must let other parties use the tech under fair, reasonable and non-discriminatory terms.

Let’s say that in the final version of the standard:

  • Company A contributes technologies X and Y.
  • Company B contributes technology Z.

Assuming that technologies X, Y and Z each have equal value, Company A has contributed twice as much to the standard as Company B. When each company develops and releases technology that’s based around the standard, they would have to pay the other company licensing fees to compensate it for its contributions.

This means that company B would have to pay twice as much in licensing fees as company A. Obviously, it’s a lot more complicated than this in 5G, but the above example should get the principle across.

Essentially, the more critical technology that a company can contribute to a standard, the greater its commercial advantages. It means that it has to pay fewer royalties to other companies, collects a larger amount in licensing fees for the use of its technology, and it allows it to develop related products and services at a lower cost.

How can a company influence a standard in its favor?

One of the most obvious ways that a company can get its technology integrated into the standard, is to simply become the first to develop and patent the most appropriate solutions. Because of the politics and seemingly arbitrary natures of some decisions, this is no guarantee, but it’s certainly a good start.

This drives companies to invest heavily in research and development, in the hope that they will be able to provide more of the solutions for the standard.

Another option is to participate more heavily in the working groups that make the decisions. This is why companies are more than happy to pay the 3GPP membership fees and take on the expenses of sending employees to advocate for their own technologies in the working groups.

Huawei & China’s involvement in 5G NR

Now that we’ve set the scene a little bit, let’s talk about Huawei and China’s involvement in the 5G standard. The initial releases of the 5G NR standard are already out to the public, so we can take stock of where Huawei stands against other organizations.

A lot of figures will focus on the sheer number of patents, such as comparisons of Huawei’s nearly 90 thousand patents, versus Ericsson’s 50 thousand. While these do give us a rough indicator of how strongly Huawei has been pushing its R&D over the past decade – particularly in the 5G arena – it’s important not to equate the quantity of patents with quality.

Not all patents are equal, equally useful or as valuable as one another. If you were given the choice, would you prefer to own a single patent for the iPhone, or a thousand patents for paper plane designs?

One of the most recent studies that attempts to compensate for this comes from IPlytics. Its Who is leading the 5G patent race report looked at the raw numbers of declared 5G patent families:

  • Huawei – 3,325
  • Samsung – 2,846
  • LG – 2,463
  • Nokia – 2,308
  • ZTE – 2,204
  • Ericsson – 1,423
  • Qualcomm – 1,330

The list continues to trail down, from companies with just under 1,000 declared 5G patent families, to those with just over 10.

The IPlytics report also charted the number of contributions that companies made to 5G standards such as 5G NR, as well as the quantities that were approved. Overall, it found that about 10 percent of contributions were approved for the standards. It showed:

  • Huawei made 19,473 contributions, with 5,833 approved.
  • Ericsson made 15,072 contributions, with 5,114 approved.
  • Nokia made 11,555 contributions, with 3,804 approved.
  • Qualcomm made 5,994 contributions with 1,994 approved
  • ZTE made 4,692 contributions, with 1,188 approved.
  • Samsung made 4,573 contributions, with 1,239 approved.
  • Intel made 3,656 contributions with 962 approved.

If we focus on the number of approved patents, Ericsson only trails Huawei by a slight margin, while the other competitors follow at significantly greater distances from the top spot.

The analysis went further, also looking at the attendance of engineers at 5G standard related meetings, which the report argues is a representation of a company’s commitment. It found the following figures:

  • Huawei – 3,098
  • Ericsson – 2,193
  • Samsung – 2,142
  • Qualcomm – 1,701
  • Nokia – 1,618
  • Intel – 1,259
  • ZTE – 1,128

When taking all of this data together, it shows that Huawei is clearly in the lead. However, considering the vast number of contributions from other parties, it’s hardly dominating the competition.

While it may not be blowing the other players away, it’s important to consider Huawei’s position in the context of how far it has come. Accurate estimates for previous mobile network generations are hard to come by. However, a report from the analyst firm Jefferies estimated that Chinese companies owned zero key intellectual property in the 2G and 3G standards.

This is likely because the country was focused on its own standards. Things began to change with the development of 4G, when in 2011, the firm estimated ZTE controlled six percent of related intellectual property, while Huawei had just a single percent.

If these figures are reliable, it shows that Huawei has come a long way, and is now a major player in the 5G world. Its rise from a nobody to a key competitor in the tech world could be seen as a challenge to the entrenched powers. Perhaps this is one reason that the company is the subject of so much animosity.

The geopolitical importance of 5G control

Now it’s time to have a look at some of the big picture elements of success in the 5G arena. One of the most obvious is the financial aspect of 5G technology licensing. Chinese companies had little control over the previous generations of mobile network standards, which means that if they wanted to use the tech, they had to pay handsomely for the licensing.

These aren’t small amounts of money at stake here. One of the biggest players, Qualcomm, rakes in about $1 billion each quarter through licensing. Nokia, another major competitor, brought in $483 million in licensing fees in the third quarter of 2017.

Controlling a greater portion of the technology in the 5G standards promises significant financial incentives. It works in two major ways. The more you have, the less you need to pay out to your competitors for their technology. It also means that they will have to pay you a greater portion for the tech your organization developed.

Historically, it’s been Western companies that profited the most from mobile network dominance. However, Huawei’s rise can also be seen as a shift in the balance of power. Not only are Chinese companies set to see a greater portion of the profits, but gaining a large stake of the 5G market has symbolic significance as well.

Dominating 5G is about more than technology

If you’ve tuned into the news occasionally over the past few decades, you’re probably aware that China has quickly risen from an impoverished country to a major economic power. Many even forecast it to overtake the US as the world’s most valuable economy.

Estimates vary, from those that say it should have already happened by now, to those that say it will never happen. The New York Times suggests most economists expect it will occur within the next 10 to 15 years.

Even if the switchover never actually comes, China’s ascent marks the first time that the US has a considerable rival since the fall of the Soviet Union. Not only are the two countries vying economically, but the rise of companies like Huawei, Alibaba and Tencent positions China as a world-class player in the tech sphere.

While the country has long been the dominant manufacturer of tech products, Huawei’s involvement in 5G standards development – as well as its rollout of the mobile network infrastructure – marks one of the first times that a Chinese company has truly had a shot at taking the reins as a global tech leader.

While some may think that the international community should cheer on China and Huawei’s rise, that’s unfortunately not how things work in the fierce and complex world of geopolitics.

Imagine yourself as one of the US’ master tacticians. Your country has been on top of the world since World War II, with the largest economy, most powerful military and impressive dominance in many technological fields.

It’s your job to keep it that way.

This involves a dizzying scheme of maneuvers, where you have to try and stay one step ahead of other countries. Since the fall of the Soviet Union, you’ve been able to rest quite comfortably, but over the past decade or two, the threat from China has become more and more significant.

If you aren’t vigilant, China might be able to knock you off the podium, taking away many of the benefits that come from being the most powerful country on earth.

China’s economy has been creeping up on the US’, and now it presents a real threat in the tech sector as well.

What do you do?

Would you be happy to let China overtake you? What if it led to outrage on the home front, with your former supporters decrying you as weak, for falling asleep at the wheel and letting your country get beaten? Or would you be willing to pull all the tricks in the political playbook to maintain your lead?

We also have to consider that this rivalry over 5G isn’t happening in a vacuum. It’s taking place at a time when tensions between the US and China have been especially strained. While the trade war may be easing, the stronger each country can appear at the negotiating table, the more likely a favorable outcome.

As you can see, the 5G race is about more than making money from licensing. It’s a symbol that China is gaining power. It’s also a symbol of the US losing its dominance. For certain interest groups, that’s a very bad thing.

How did Huawei progress so quickly?

So how did Huawei go from a bit player to having a seat at the head of the 5G table? There are a few factors, including China’s overall growth and maturity, as well as Huawei’s adept management.

One of the core reasons is that Huawei has been investing tremendous amounts of money into research and development. In 2017, it invested $13.23 billion back into R&D, which equated to about 15 percent of its revenues. This trend has been on the upswing, with the company investing $15.3 billion in 2018.

More specifically, the company invested $600 million just in 5G research between 2009 and 2017, and promised to throw in another $800 million in 2018 alone.

In comparison, Ericsson, a major Swedish competitor had a total R&D budget of about $2 billion (the rough value of 18.9 billion Swedish Krona at the time of writing) in the first six months of 2018. Let’s extrapolate and assume that the total R&D budget for the year was around $4 billion, which is a little more than a quarter of Huawei’s spend.

To be fair, Huawei’s business is more diverse than Ericsson’s, so comparing the two overall R&D figures isn’t necessarily the best metric for which company is investing the most in 5G development, nor is it a measure of which company is most effective in that arena.

Unfortunately, the figures that would give us the most insight aren’t always available. Even if we did have these figures, they may not tell the whole story. Assuming that each company does the bulk of its research within its own borders, you would also have to factor in the differences in wages and other costs before you could get any real understanding of what the figures really mean.

On top of Huawei’s huge R&D spending, the company also boasts a team of over 300 researchers working on wireless communications.

It’s worth noting the accusations that Huawei has received funding, subsidies or preferential treatment from the Chinese Government, which is allegedly partially responsible for the company’s overall rise, its prominence in the 5G sector, and its ability to undercut rivals.

In late 2019, the Wall Street Journal alleged that the company had received as much as “$75 billion in tax breaks, financing and cheap resources” from the Chinese state.

According to ZDNet, Huawei acknowledged that it had received support from the Government, but stated that it has been treated the same as any other company in China:

“The fact is that every tech company that operates in China is entitled to certain subsidies from the government, as long as they meet certain conditions… The subsidies provided to tech companies are primarily used to support research programs. Huawei applies for these government subsidies just like any other company does.”

Instead, the company said that its successes were due to high levels of R&D funding and dedicated employees.

While these are certainly high figures if true, it’s important to acknowledge that the US Government also gives its tech companies a range of tax breaks and subsidies.

The CIA has also stated that Huawei receives funding from Chinese intelligence agencies, although it has not publicly released its evidence.

At this stage, there probably isn’t enough information to decide on which side to believe. While Huawei doesn’t have the best reputation, there are also reasons that you should be skeptical of the allegations, which we will cover later in the article.

So what’s Huawei actually doing with its 5G tech?

huawei-5g-2

Huawei’s headquarters, where much of its decision-making takes place. Huawei Headquarters tower in Shenzen by Brücke-Osteuropa. licensed under CC0.

With all of its funding and development of key technology, Huawei has also been extremely active in the ongoing rollout of 5G. Among its many 5G-related achievements, Huawei has:

With Huawei’s advanced position in the 5G market, it is able to offer its infrastructure at an appealing price point for its quality and the speed of deployment. This has led to interest from a wide range of countries. So far these and many more countries have already announced 5G contracts with Huawei:

  • China
  • South Korea
  • Russia
  • Spain
  • Mexico
  • Saudi Arabia
  • The United Arab Emirates
  • South Africa
  • The Philippines

According to Foreign Policy, Huawei has already signed over fifty contracts alongside 45 memoranda of understanding, which indicate a tentative commitment to proceed. Having already shipped over 150,000 5G base stations, Huawei now controls 29 percent of the market. The company’s next closest rival is Nokia, which has a market share of 16 percent.

Huawei’s 5G bans

Huawei’s market share could have been even higher, if not for the fact that the governments of the US, Australia, New Zealand, and Japan have banned Huawei’s 5G infrastructure over allegations that it is too much of a national security risk. A number of other countries have also considered banning the company.

Huawei has a controversial history. It was first banned from bidding on US government contracts in 2012 following a U.S. House of Representatives Intelligence Committee report suggesting the company was a security threat under the influence of the Chinese government. 

But the current 5G bans can be best traced back to 2018. As the China-US trade war was picking up speed, the US signed a bill that would ban tech from Huawei, ZTE and other Chinese companies in government use.

In August of 2018, both Huawei and ZTE were banned from being involved in building 5G networks in Australia. New Zealand followed with its own ban in November.

After a series of commotions, Huawei was effectively banned in the US in May 2019, when Trump signed an executive order that prevented US companies from using tech from businesses deemed as security threats. On the same day, the Commerce Department put Huawei and many of its affiliates on a blacklist that blocks US entities from purchasing from them.

After a long and controversial decision-making process, the UK finally agreed to allow Huawei to play a role in the development of its 5G infrastructure. However, the company is labeled a high-risk vendor that is not permitted to control more than 35 percent of the market. It isn’t allowed to be used in core parts of the network, and it has been banned from sensitive locations.

Canada is still deciding whether or not to allow Huawei to construct its 5G infrastructure and appears to be examining the UK’s solution. However, the situation is even more politically complex, because the country is currently weighing up whether to extradite Huawei CFO Meng Wanzhou to the US over charges relating to breaching sanctions against Iran.

The decisions of the above countries are significant because they haven’t necessarily been made independently. The US, the UK, Australia, Canada and New Zealand are all members of the Five Eyes, an alliance of intelligence sharing between the nations.

As the most powerful country in the group, the US pressured its partners to also ban Huawei. Some of these attempts have been relatively subtle, such as Vice President Mike Pence’s call for “…security partners to be vigilant and to reject any enterprise that would compromise the integrity of our communications technology or our national security system.”

The UK – the first partner to break step thus far – faced much stronger threats. On the more extreme end, Whitehouse officials were threatening to limit intelligence sharing if the UK Government gave Huawei the green light. Despite this, the threat has apparently since been withdrawn.

Some US officials have been so perturbed that a group of Republican senators even introduced a resolution to condemn the UK’s decision. That’s right, they’ve gone so far to show their disdain toward the UK’s actions that they are trying to make it official.

The US also made similar threats to the German Government if it ends up choosing to use Huawei equipment in its networks.

Japan, another close ally to the US has also effectively banned Huawei and ZTE equipment from its 5G networks. Although it didn’t name the companies specifically, the telecoms ministry stipulated that network providers must “take sufficient cybersecurity measures including responding to supply chain risk”, which essentially adds up to a ban on the Chinese companies.

Countries such as Germany, Poland, India and many others have also weighed up the risks of allowing Huawei to be involved in their 5G networks. For the most part, they have decided to move forward in negotiations with the company, however often with restrictions or increased monitoring in place.

It seems a little too coincidental that the countries to ban or face the most turmoil over Huawei’s 5G also happen to be some of the US’ closest allies. If the decisions on whether or not to allow Huawei were truly based on the security risks rather than politics, you would imagine that a host of other countries would strongly reject the company’s tech, rather than just a cluster of the US and its friends.

Is Huawei really spying?

Now that we’ve covered the background, we’re ready to get to the important part and discover whether Huawei really is a security threat, or if this is all just some kind of politicized Sinophobia. 

Unfortunately, the answer isn’t so clear-cut, and it depends on your definition of spying, whether you consider instances from years ago, and how much evidence you need as proof.

First off, let’s make it clear that Huawei is no angel. It definitely has done some pretty bad things. However, which tech company – or any large organization for that matter – hasn’t? If we were to list out all of the unethical behavior and accusations against Google or Facebook, they certainly wouldn’t look too good.

This isn’t to excuse Huawei or any of these companies. In an ideal world, we would go after them with full force whenever they did something untoward. However, we do need to put things in the proper context and acknowledge that while Huawei has done a bunch of negative things, it’s hardly exceptional in its field.

Does Huawei have ties to the Chinese government?

One of the main allegations against Huawei is that it’s really just a puppet for the Chinese Government. It’s true that the company’s founder, Ren Zhengfei served as a researcher in the Chinese People’s Liberation Army before establishing the company.

It’s also true that Huawei has received some impressive subsidies and grants from the Government over the years, as we noted earlier in the article, but that’s hardly exceptional.

The more controversial part is the company’s convoluted ownership structure, which an academic paper recently alleged leaves it open to state influence. Ren owns about one percent of shares, while employees hold the rest.

However, the paper asserts that Huawei’s employee union, like all unions in China, is part of a labor federation run by the Communist Party, which makes the company “effectively state-owned”. While the company may not officially be run by the Chinese Communist Party, the situation is murky enough to bring worries about state influence.

There also doesn’t seem to be any documentation in English of Huawei publicly going against the Chinese Government’s wishes.

It’s worth noting that US companies often follow the demands of the US Government as well. One of the most shocking examples was when they helped to enable the NSA’s mass surveillance programs. However, having some independence is important because it stops the government from having too much sway in other matters.

One example of when this separation was beneficial was when Apple refused to build backdoor access to the San Bernardino shooter’s iPhone. While the information may have been helpful in the investigation, creating backdoor access would have endangered everyone’s security, so Apple’s refusal to abide helped to protect all of its users. It’s doubtful as to whether Huawei would go to similar lengths to defy the Chinese Government.

China’s complicated legislation

It’s not just Huawei’s possible ties to the government that are worrisome. All Chinese companies are subject to the country’s 2014 Counter-Espionage Law and 2017 National Intelligence Law, which some allege could be used by the government to exert its influence, perhaps even allowing it to demand a company inserts backdoors.

Huawei and some legal experts have disputed these claims, while others aren’t so convinced. Donald Clarke, a specialist in Chinese law at George Washington University, said that it’s possible for Huawei to be exempt from any such demands under Chinese law, but in reality, this doesn’t necessarily matter.

“There’s a whole variety of pressures that the government can bring to bear on a company or individual, and they are not at all limited to criminal prosecution… China is a Leninist state that does not recognize any limits to government power.”

While such muddy legal waters are hardly ideal, especially in matters this serious, China isn’t alone in having laws that could potentially allow the government to demand backdoor access. Australia’s Assistance and Access Bill is also alleged to give the authorities similar capabilities.

Has Huawei violated sanctions?

Other controversies that hang over Huawei are the various allegations that the company has violated international sanctions. At this stage, none of the allegations have been proven in court.

However, there is an ongoing high-profile case involving Meng Whanzou, Huawei’s CFO and the daughter of its founder. The US alleges she lied to financial institutions regarding money that was actually destined for Skycom, a company that had attempted to sell US equipment to Iran in violation of sanctions.

It’s a complex case, and the optics don’t necessarily look great, but several different legal experts have questioned the basis of the charges, citing double criminality and the fact that what she is being charged for isn’t actually a crime in Canada, where she was arrested. Another lawyer noted just how exceptional the case was, “These charges against Ms. Meng go well beyond any set of criminal charges related to violations of U.S. sanctions in Iran of which I am aware.”

It’s not known how the trial will end up, but it’s important to consider it within the context of the US-China trade war, and the ever-increasing tensions with Huawei. While there could be some merit to the legal arguments, ultimately, this case is extremely political as well.

Did Huawei steal all of its technology?

One of the incontrovertible truths in the allegations against Huawei is that it does have a history of stealing intellectual property. There have been claims of this for decades, many of which probably have at least some degree of proof. The two most irrefutable cases include:

These are clear cases of egregious theft, and companies should be punished strongly for any such attempts to discourage further IP theft. While these cases can’t be denied, it’s important to note that one originates from 2003, while the other occurred in 2013.

There have been no major intellectual property theft cases against Huawei in recent times. However, it could be argued that this has more to do with the difficulty of prosecuting intellectual property theft, and isn’t necessarily an indicator that it’s not happening. 

Despite this, when it comes to 5G, most of Huawei’s progress appears to have come about through its own research, or IP that it has legally bought the rights to.

The point isn’t to try and defend Huawei – these actions were unequivocally wrong. Instead, it’s to question why Huawei still receives so much criticism for them.

Huawei: The spying allegations

Given what you may have previously heard about Huawei in the news, you would probably think that we have mountains of proof about Huawei’s spying. The reality is that there has not been a shred of evidence released to the public. There have been a lot of claims, but little to back them up.

We don’t have time to cover every allegation, but we will cover those that seem to be the most damning. They trace back to the early 2000s, and since then, the company has faced a high degree of scrutiny.

African Union headquarters

One of the most alarming allegations was the result of an investigation by the French newspaper Le Monde. The report alleged that Huawei and other Chinese entities had helped to fund and build the African Union headquarters in Ethiopia, and that they had used the access to spy on the building over a five year period

It stated that a large amount of data was being transferred at 2 am every morning, and was being copied to servers in Shanghai.

As expected, the Chinese government denied the report. What’s more interesting is that it was also denied by the Ethiopian Prime Minister, as well as the head of the African Union Commission.

While these denials may be enough to completely cast aside the claims in other circumstances, it’s worthwhile noting that the head of the African Union Commission made the statement while he was standing alongside the Chinese Foreign Minister. China also pumps tremendous amounts of money into various African countries, so there could be political motives at play in the denials.

Supposed Vodafone backdoors

In April 2019, Bloomberg published a story alleging that Vodafone Italy had “found hidden backdoors in Huawei equipment”. Apparently, the issues were found in 2011 and 2012, and resolved by Huawei when Vodafone notified the company of the problems.

The big issue with Bloomberg’s article is that it claims the security holes were backdoors – hidden access that has purposely been inserted by an attacker, allowing them to come and go as they please.

The other parties, both Huawei and Vodafone, claim that they were simply security vulnerabilities – the kind of bugs that exist in all software. While bugs are hardly a good thing, they’re part of the flawed process of development.

Companies build imperfect software, not knowing about the specific security holes that they have left behind in the code. Over time, these are discovered, and developers race to issue security patches to solve the problems.

While a backdoor and a security vulnerability can be functionally the same in certain circumstances, the difference is that a backdoor is knowingly inserted, as Bloomberg alleges, for the purposes of spying or secret access.

Both parties deny this, and it’s worth noting that Bloomberg has a terrible reputation when it comes to information security journalism. Their 2018 report, The Big Hack, about Chinese spy chips being planted in hardware has been completely refuted by every party, and again, there is no evidence to back it up. Yet, the publisher refuses to retract the story or apologize.

Huawei: Under high levels of scrutiny

The above is pretty much as bad as the accusations get, and there are no instances where any greater amount of evidence has been released to the public. Honestly, considering the furor that has surrounded the company, you would expect that we had something a little bit more concrete to go on.

This paucity of evidence becomes even more concerning when you consider how much scrutiny the company has been under. One of the most prominent examples is the UK’s 2010 opening of the Huawei Cyber Security Evaluation Centre (HCSEC), which was set up with a staff of 40 to thoroughly review the company’s software and hardware.

The HCSEC’s Oversight Board is made up of officials from the UK’s National Cyber Security Centre, GCHQ and other intelligence agencies, and has spent almost a decade finely combing over Huawei’s security.

The board’s 2019 report was certainly not flattering of Huawei. It found flaws in the company’s code and its processes, and even had limited faith in the company’s approach toward rectifying the issues. However, it did not find any malicious intent, and Huawei is far from the only company to be littered with security flaws due to bad engineering.

In a blog post explaining the country’s choice to move forward with Huawei, The UK’s National Cyber Security Centre (NCSC) technical director Dr. Ian Levy said that the country has “always treated them as a ‘high-risk vendor’, however he emphasized that it’s still possible to move forward in a limited way, with a focus on “managing risk”.

If all of HCSEC’s testing had found any greater evidence of malicious actions in their decade of scrutiny, you would expect the NCSC to stop Huawei from having any part in the country’s networks. Despite this, Huawei has been given the green light, albeit in a restricted fashion.

Aware of the many claims of spying against the company, Huawei labeled them “unfounded and unproven” in 2011, and called on the US government to investigate its business. It turns out the US was way ahead of them, with the Snowden leaks showing that the NSA had been running a secret program against Huawei.

This operation may have been a little more intense than Huawei expected – it involved accessing founder Ren Zhengfei’s communications and busting into the company’s internal networks.

Still, after all of this, no solid evidence of spying has been released to the public.

So what do we have?

The accusations against Huawei

When it comes to Huawei’s surveillance, there have been a lot of claims made by some important people and entities. These claims seem to have made up much of the fuel that has driven the outrage over Huawei. They include:

  • The former head of the CIA Michael Hayden claiming in 2013 that Huawei had “at a minimum… shared intimate and extensive knowledge of the foreign telecommunications systems it is involved in” with the Chinese Government.
  • The CIA supposedly showing the UK proof that Huawei has received money from Chinese intelligence agencies.
  • A confidential document supposedly passed from US intelligence to the German Foreign Ministry, which proved that Huawei cooperates with Chinese authorities.
  • A Dutch newspaper claiming that AIVD, the country’s intelligence agency, was aware of backdoors in Huawei’s products.

What does each of these claims have in common?

There’s no publicly released evidence to back them up.

Should we believe the accusations?

These and similar accusations have been circling for years, and have become so frequently repeated that they have morphed in the public consciousness to become proof of Huawei’s spying.

But when you take the time to look through everything that has been gathered about Huawei over the years, it’s not really that damning – certainly not enough to justify the colossal media outrage. Despite all of the excessive scrutiny, nothing concrete has been released regarding Huawei’s surveillance on behalf of the Chinese Government.

If there really is evidence, why has it been kept from the public? If the CIA or whoever else just released it, we wouldn’t need to have this whole debate.

So why has this been such a pervasive issue?

Honestly, a lot of it seems to be more about politics than anything based on fact. Going back to our arguments at the start of the article, the growth of China and Huawei can be seen as threats to the US and its companies. If Huawei dominates 5G, it will be more than just a financial windfall. It’s also a sign that China has made it to the top in the tech sphere.

On the other hand, the Huawei detractors do kind of have a point. It’s probably not a good idea to have a company from an adversarial country involved in sensitive parts of your telecommunications infrastructure. If things were to go sour, and the company had intimate access, it could potentially use its leverage for surveillance or to sabotage the network.

It’s also true that China has a long history of cyber espionage and state-sponsored hacking. However, it seems as though the activities of China and Huawei have been conflated in many arguments against the company.

Many of the attacks aimed at Huawei are about as valid as trying to ban Apple from a country on the basis that the American Government was responsible for the devastating Stuxnet worm. It’s not necessarily fair to associate a company with the actions of its government.

The problem is that we haven’t been examining the issue based on the evidence. If we had looked at Huawei’s technology and capabilities impartially, and determined that using it in certain instances carried too great of a national security risk, that would have been fine.

But instead of being reasonable, the whole debate has been clouded by lies and half-truths, politicization, and Sinophobia. This has prevented the public from being able to examine the issue on its merits and diminished our ability to come up with a solution that works best for everyone. 

It’s also diverted our attention from many of the security issues inherent in 5G. In the end, the issue isn’t that many countries have banned Huawei it’s that we’ve been deprived of a fair and informed debate

Maybe we could have trusted Huawei for the entire 5G network.

Maybe we could have adopted Huawei tech in certain parts, like the UK.

Maybe it is best to completely ban Huawei from 5G networks.

Unfortunately, we’ve been denied the opportunity to make a reasonable choice based on the evidence. Instead, we’ve been forced into a corner by accusations and fear.