Huawei exercises state influence through private means. It is the East India Company of the modern age.

Six or more years ago a friend of mine was considering using Huawei’s technology in a network of undersea cables she was planning to lay. She asked me what I knew of the company. I made a few calls, and this is what various friends told me over an afternoon on the phone. I guess I would summarise them as a sort of modern East India Company – the exercise of state influence through a private company, See below.

Key risks to Western interests from Huawei

• Shut down of Strategic Infrastructure.
• Espionage.
• Massive and borderless theft of Intellectual Property.

Possible risks to those partnering with using Huawei equipment

• Denial of service by US, China or other parties.
• Possible future US or other government legislation.
• Loss of customers.

Asssement of a former head of technology for a major US intelligence agency

“Smart people will avoid Huawei – their reputation here is tarnished.

They have made a number of attempts to partner with US firms, and their reputation stinks on Capitol Hill and with the Committee on Foreign Investment – and rightly so. They fill US subsidiaries with smiling American faces, but the senior leadership of the firm comes straight out of the People’s Liberation Army. They will be increasingly curtailed in the US because of grave concerns of back door opportunities for Chinese intelligence.

The Europeans are rather more forgiving – but the situation with Huawei in the US will only get worse. This company is 100 per cent a front for Chinese Intelligence. It is beyond vague suspicion that China is using their growing export sector to develop built in spying capabilities in US networks”.

View of senior figure close to a UK intelligence agency

“There should be no surprise that these people are offering very competitive prices and payment terms. This is a very aggressive company. We have concerns about their bona fides – if you see what I mean. They are more about taking positions to gain access than they are about worrying about profit. They will happily take losses for access, because it gives them the opportunity to spy.

You asked me what they would do in ten years time. Remember when Russia invaded Georgia? As a former bit of the Soviet Union, Georgia’s infrastructure was still controlled by Russia. So the Russians just switched it off. In the same way, in the future the Chinese could just switch off large bits of our infrastructure: even now, we can no longer rely on large chunks of our strategic infrastructure to work.

In the US, a lot of people are very wary of them. Huawei have excellent equipment, but the concerns about the company’s parentage and who supports them is considerable. In a tidy irony, in the UK, the Government’s Chief Information Officer – John Suffolk – was tasked with carrying out an enquiry into Huawei: he is now Huawei’s Global Head of Cyber Security. If that ain’t a conflict of interest, I don’t know what is!

A major concern is that when they get sufficient hold of the infrastructure we will have a real problem. When objections were made to their involvement in the UK, Huawei’s lobbyists went straight to Cabinet Ministers. Be that as it is, this remains a large Chinese company with strong links with the Chinese government.

But what could this mean if future for Western companies who partner with them or use their equipment? Customers could desert them in droves. Companies who do their due diligence would realise that running things through Huawei pipes could mean loss of intellectual property. The risk from this company goes well beyond conventional espionage or shut down of strategic infrastructure.”

Assessment of a former Huawei employee

“The points you make about threats to strategic infrastructure, and about espionage and intellectual property are genuine concerns. Indeed, Australia in effect banned them from competing for their National Broadband Network last year!

The US is concerned for security and commercial reasons. The UK is a bit more relaxed, and now have a security cell that crawls over Huawei stuff and says it is OK. When the stuff passes it is used by companies like BT. But I say this: if a 16 year old with Aspergers can break into US Department of Defence computers, what is to stop a very clever Chinese company putting in trap doors that they can activate whenever they want? All any tester can ever do is say that we have not found anything: they can never say there is nothing there.

In 2010, the Chairman of the [UK’s] Joint Intelligence Committee and Head of Intelligence Analysis, Sir Alex Allan, circulated a memo to Ministers. It warned that China was involved in electronic espionage on a grand scale and may have gained the ability to shut-down Britain, halting critical services. So there is real concern. Huawei make a big deal about being a private company. But in reality this is nonsense: if the Chinese government ask them to jump, they will ask “How high and how often?”. For heaven’s sake, the Chinese government probably funds them.

But even if you take the most benign view – if, for some reason the Chinese government, saw it as advantageous for a network to fail for military, political or commercial reason, Huawei would do it.

China sees Huawei and all their major companies as vanguards of their political and economic power. Control of communications networks gives them huge power. This is all part of China’s resurgence on the world’s stage – and they are doing what we did 300 years ago. What was good for the East India Company was good for Great Britain.

Any service that is important to the US – including the commercial, like banking – using Huawei equipment could be vulnerable to the edicts of future US governments. If you are in a business critical area using this kit, the US might decide not to allow you to play.”

Note on Major Ren Zhangfei.

Huawei was founded by Ren Zhangfei, a former People’s Liberation Army Major, in 1988. Ten years earlier, he swore loyalty to the Chinese Communist Party, despite his parents connections to the Kuomingtang. In the military, he had worked in the PLA’s Research Institute as a military technologist where he had been responsible for a number of unknown technology achievements.

As the Congressman Mike Rogers, a former FBI agent and now Chairman of the US House Permanent Committee on Intelligence, said last year of Ren’s background: “That’s what we would call a clue”.

It is claimed that early Research and Development funding came directly from the Chinese Government. The company’s share ownership remains opaque. Ren was qrecently elected a member of the 12th National Congress of the Communist Party of China.

Adam Holloway

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