Joyce Huang contributed to this report.
SHENZHEN, CHINA — U.S. officials have effectively banned Chinese telecom titan Huawei from building next-generation 5G mobile networks in the United States and are warning other countries about the company’s national security risks.
On Wednesday, U.S. President Donald Trump signed an executive order that bars American companies from using telecommunications equipment that is made by companies that pose a national security risk. The order, which declares a national emergency, is the first step toward formalizing a ban on doing business with Huawei.
For its part, however, Huawei has shown no signs of backing down and has been making extraordinary pledges to win over its critics and dispel allegations that it is a security threat. The company says it will quit its business if forced to spy on its customers and now its company chairman Liang Hua has offered to sign “no spy” agreements as well.
Speaking through an interpreter during a visit to London, Liang said Huawei is willing “to commit ourselves to making our equipment meet the no-spy, no-backdoors standard.”
What does Huawei hand over?
It is unclear what Liang means by “no-spy, no-backdoors” since Huawei, like all technology companies, requires users to sign agreements acknowledging that the company may share their personal information if required by local authorities.
Most technology companies, such as Google and Facebook, disclose these government information requests in regular public reports. The companies explain when they comply with the government requests and when they challenge them in court.
There is no information about what data Huawei hands over to Beijing authorities. If Chinese officials determine a matter involves “state secrets” or a criminal investigation, officials can legally justify intercepting any communication. Critics say Beijing defines “state secrets” so loosely that it can cover virtually anything.
In his comments to reporters, Liang says Huawei does not act on behalf of China’s government in any international market. According to Reuters, he also denies that China’s laws require companies to “collect foreign intelligence for the government or plant back doors for the government.” Adding that Huawei is also committed to following the laws and regulations of every country where it does business.
Independent business or state organ?
Despite the criticism, Huawei is doing lots of business. The company says it has signed 40 contracts to build 5G networks, more than 20 of which are in Europe. It has shipped 70,000 base stations for installation, all to locations outside of China. Base stations are a key component of the infrastructure that is needed to build up the new network.
Huawei spokesperson Joe Kelly says that maintaining the trust of its customers is key to the company’s continued success.
“Today, with 4 billion people around the world (using our products), at the scale at which we operate, if we were installing back doors and taking data, our carriers would be aware, they would see it for themselves and then they would stop doing business with us,” he said.
In the 5G debate, Huawei has voiced its willingness to stake the company’s continued success on its commitment to security.
Company founder Ren Zhengfei has said that Huawei has never been asked to spy by any country and that the business would be shut down if it was forced to engage in spying.
Joe Kelly repeated that pledge when VOA paid a recent visit to company headquarters.
“He would close the business down rather than compromise the security and safety of any customers’ data,” Kelly said.
In President Xi Jinping’s China, however, critics find such promises hard to believe. Since coming to power, Xi has stressed the party’s dominance over all aspects of society. Since coming to power there have been numerous examples of how Xi has no qualms in using the authoritarian country’s internal security apparatus and technology to silence any who would criticize or challenge him, including influential businessmen just for taking issue with his policies.
U.S. officials have suggested that if countries choose to trust Huawei for their 5G network, Washington may reassess sharing information with them.
The executive order that was signed by Trump on Wednesday not only paves the way for a formal ban on Huawei from building networks in the United States. According to the Commerce Department, Huawei and 70 other affiliates will be added to what is called an “Entity List,” which will make it more difficult for the company and other entities to buy parts and components from U.S. businesses.
From Chinese tech start-up to global power
Ren Zhengfei, a former military engineer, founded Huawei in 1987 with five other investors in Shenzhen, with a little more than $5,000. Over the past five years, it has invested $60 billion in research and development, and that number is expected to continue to grow.
The company’s massive research and development campus in Dongguan, an industrial city north of Shenzhen, is a stunning visual example of the company’s rags to riches story.
The campus is modeled on a dozen European cities and even has its own train.
Last year, Huawei made more than $100 billion in revenues, and says it continued to grow in the first quarter of this year even as Washington tried to block it from markets globally.
For as much success as the company has had, the future looks even brighter with the promise of 5G technology.
Downside of 5G
5G will link people, homes, industry, cars and cities, offering connectivity that will create new jobs and business opportunities. With that will also come more ways that networks, data and security can be compromised.
The rollout of 3G and 4G mobile networks powered a generation of technology companies, and 5G is expected to be an even greater leap.
“Right now all types of human activities are moving online and after 5G comes what is even more worrisome than the commercial applications and sharing of personal information that will come with it, is that ubiquitously everything will be online,” said Karl Li, an electric engineering professor at Taiwan’s National Cheng Kung University. Li was also the former head of cybersecurity at the National Center of High-Performance Computing.
Li said that while it may seem that the debate over Huawei is just about economic benefits and information security, it is much more than that.
“It is also an issue of national competition, it’s also an issue of national security,” he said. “A national security issue that has an implication on international relations as well.”
He adds that if all of the infrastructure and services for 5G networks were controlled by Huawei, the company would not only have complete access to any personal data, but also could instantly paralyze all kinds of systems and operations in a country.