UK faces pressure to review reliance on Huawei
Chinese telecoms giant in the firing line as Western governments fear its technology is a threat to their national security
As Donald Trump and Xi Jinping tucked into sirloin steaks and goat’s milk ricotta last Saturday night at the G20 summit in Buenos Aires, 7,000 miles away, in windy Vancouver, the US administration was making its move.
While Meng Wanzhou was travelling through the Canadian airport for a connecting flight, she was seized by officials. The US Department of Justice had requested the Canadians arrest the chief financial officer of Huawei, the controversial Chinese telecom giant, for extradition to the US on allegations she had violated sanctions on Iran.
On the surface, the arrest of Wanzhou – the daughter of Huawei’s powerful founder Ren Zhengfei, and the woman many believed was being lined up to take on the CEO post – seems a pointed attack by the US in its ongoing trade challenges with China. But in recent months, mounting concerns around Huawei have started to extend well beyond the bluster from Washington.
Huawei is the world’s largest supplier of telecommunications network equipment and secondbiggest maker of smartphones, with revenue of about $92bn (£72bn) last year. Unlike other big Chinese technology firms, it does much of its business overseas and is a market leader in many countries across Europe, Asia and Africa.
Both Australia and New Zealand, two countries inside the Five Eyes intelligence-sharing alliance, have taken steps to prevent the Chinese company from deploying its tech in their national infrastructures over potential threats to national security. Governments are concerned over the close links between Huawei and the Chinese military, with countries fearing that Huawei technology could be used to conduct espionage on behalf of the Chinese government.
Huawei has consistently denied allegations that its devices could be used for spying. A spokesman recently said: “Huawei firmly believes that our partners and customers will make the right choice based on their own judgment and experience of working with Huawei.” It may not be a household name in the UK like other technology businesses such as Microsoft and Apple, but the Huawei’s devices are widely used in the vital broadband and telephone backbones that make up the country’s national infrastructure. They span the entire telecoms supply chain, with Huawei running everything from basic equipment to far more complicated software. The firm is involved in almost every aspect of the UK’s telecoms infrastructure.
Huawei has also forged political and academic links with the UK, including £3bn of recent spending commitments and multiple ongoing projects with British universities.
The close relationship between Huawei and the UK may make it difficult for its devices to be removed from UK networks, especially the fixed-line technology. “It is too late for us to actually now try to pull Huawei out of all the systems that it is used in,” says Admiral Lord West, a former security adviser to Gordon Brown. “We’ve actually got to try to accommodate and find a way of ameliorating the risk … they are already so involved across the board it would take a huge amount of work to extract them from every single area.”
In Huawei’s efforts to win over the West, the UK has been seen as a crucial ally by the Chinese company. While others opted to open up their networks to Nokia or Ericsson, the UK welcomed the Chinese tech giant, a relationship that evolved after BT threw its weight behind the business in 2005. This first key win then laid the groundwork for Huawei to sign another, more significant, agreement with Vodafone.
One analyst in the telecoms sector suggested that Huawei’s activity in the UK has involved more than just the sales of equipment. The company does a significant amount of research and development in the UK and “probably has more people here in the UK than in the rest of Europe”.
“They’ve used the UK as a marketing pitch, which says: ‘Here is a major Western government who thinks we’re pretty good and we do a lot of business with them, so what’s your problem? Why don’t you all do business with us?’”
In the years since it entered the UK, Huawei has made major investments in the country – between 2013 and 2017, it spent a total of £1.3bn in both procurements and investments. Priscilla Moriuchi, who used to run the Asia threats team of the NSA, said: “The UK has been willing to take Chinese investment in sectors that other allies or partners may not have.”
From the outside, certainly, the UK has seemed pretty cosy with the Chinese firm. The National Cyber Security Centre (NCSC) and Huawei operate a testing facility together in Banbury, widely known as “the Cell”, where they monitor threats and backdoors in Huawei’s hardware.
For years, report after report, released by the watchdog that monitors Huawei in the UK and overseen by the National Cyber Security Centre, has claimed Huawei poses no risk to national security.
But in recent months the tide has changed. Over the summer, the Huawei Cyber Security Evaluation Centre released a report that found the body could now only provide “limited assurance that any risks to UK national security from Huawei’s involvement in the UK’s critical networks have been sufficiently mitigated”. It said that “shortcomings in Huawei’s engineering processes have exposed new risks in the UK telecommunication networks and long-term challenges”.
Although publicly the NCSC has said it is working with Huawei to “manage cyber security risks”, sources told The
Daily Telegraph that relations were now “strained”, as a wave of protectionism sweeps across the world.
This week, BT said that within two years it will remove Huawei devices from its core 4G network. But yesterday Three said that it had “no concerns” about partnering with Huawei having gone through a “rigorous procurement process”.
And Manchester University, which runs six research projects with Huawei, said that it is now monitoring the situation with the company, although a spokesman said that the university has “no immediate plans” to review its ongoing work with Huawei.
As pressure continues to mount on the Chinese firm from countries across the world, the UK has some tough choices to make.
Vladimir Putin, Russia’s president, and Meng Wanzhou, chief financial officer for the Chinese tech titan Huawei, at the VTB Capital Investment Forum ‘Russia Calling!’ in Moscow earlier this year