Huawei linked to army, spies
A Chinese telecommunications giant that wants to supply vital technology for Britain’s new 5G mobile network has received funding from branches of Beijing’s state security apparatus, the CIA has told British spy chiefs.
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, according to a United Kingdom source.
The US shared the claims with Britain and its other partners in the Five Eyes intelligence alliance – Australia, New Zealand and Canada – earlier this year, with the UK entering the final stages of a wider review into its next generation mobile network rollout.
The funding allegation is the most serious claim linking the world’s largest telecoms equipment manufacturer to the Chinese state.
Huawei insists that it is a private company independent of influence from the Chinese government, and has repeatedly denied posing any security risks.
Critics, however, warn that China’s laws oblige companies to co-operate with its security branches, and that "backdoors" could be built into software allowing it to spy on or disrupt other countries’ communications.
The Whitehall review into plans for Britain’s introduction of 5G will be discussed by Prime Minister Theresa May, cabinet ministers and security chiefs at the next National Security Council, expected to be held next week. A Whitehall source said of the review: ‘‘I don’t think it’s massively supportive [towards Huawei].’’
Only the most senior UK officials are believed to have seen the intelligence, which the CIA awarded a strong but not ironclad classification of certainty.
Separately, a US intelligence source said American agencies believed that the Chinese ministry of state security – its principal security and espionage organisation – had approved government funding for Huawei.
The US source said that allowing Huawei to sell its 5G technology to any member of the Five Eyes club was "’’so problematic’’ because ‘‘China has intelligence and national security laws which compel companies to assist the Chinese military. There’s no such thing as a true private sector in China’’.
After US agencies tracked the funding for Huawei, Washington decided that it was too risky to do business with the company, the source said.
Huawei declined to comment on what it called unsubstantiated allegations. Its executives have said that the Chinese state has never asked it to gather information, and that it would ‘‘categorically refuse’’ if such a request was ever made.
Huawei, which has its headquarters in Shenzhen, was founded in 1987 by a former People’s Liberation Army officer, Ren Zhengfei. It has admitted receiving subsidies from the Chinese state in the past. In 2012, one of its executives, Chen Lifang, said: ‘‘We receive legal subsidies. Like European countries, China also gives out subsidies for R&D [research and development] activities. Huawei has taken part in such European and Chinese schemes.’’
The US has banned Huawei from its federal government networks and has put pressure on allied nations to ban its involvement in 5G schemes. Sceptics argue that the campaign is part of a trade battle with China.
Last month GCHQ, Britain’s cybersecurity centre, warned that the government would find it ‘‘difficult’’ to manage the security risks posed by the Chinese company after identifying ‘‘significant, concerning issues’’ with its software in the UK. The intelligence agency said Huawei had made ‘‘no material progress’’ in addressing security concerns it first raised last year.
GCHQ said it ‘‘does not believe that the defects identified are a result of Chinese state interference’’ but rather about ‘‘basic engineering competence’’.
The US, Australia and New Zealand have blocked the Chinese company from providing key elements of telecoms. Canada, like Britain, is reviewing its position.
A company spokesman said: ‘‘Huawei does not comment on unsubstantiated allegations backed up by zero evidence from anonymous sources.’’
– The Times