How Huawei Landed At The Center Of Global Tech Tussle

2. How important is Huawei?

In just over three decades it’s grown from an electronics re-seller into one of the world’s biggest private companies, with leading positions in telecommunications gear, smartphones, cloud computing and cybersecurity, with substantial operations in Asia, Europe and Africa. With a 2019 sales target of $125 billion, Huawei generates more revenue than Boeing Co. It’s plowed billions of dollars into 5G and is now among China’s top recipients of patents both internationally and domestically. It has helped build 5G networks in more than 10 countries and expects to do the same in another 20 by 2020.

3. Why is its equipment a security issue?

The U.S. government — like the Chinese and others — is wary of employing foreign technology in vital communications for fear that manufacturers could open backdoors to information, or that the companies themselves would hand over sensitive data to their home governments. Vodafone is said to have found and fixed backdoors on Huawei equipment used in the carrier’s Italian business in 2011 and 2012. While it’s hard to know if the vulnerabilities were nefarious or unintentional, the revelation dealt a blow to the Chinese company’s reputation. U.S. Secretary of State Michael Pompeo has said the U.S. might hold back intelligence-sharing with NATO allies if they use Huawei equipment, a threat met with some skepticism. The 5G networks are of particular concern because they will go beyond making smartphone downloads faster to enable new technologies like self-driving cars and the Internet of Things.

Japan and Australia are among a handful of countries that have joined the U.S. boycott, with Vietnam quietly following suit. But Huawei does have plenty of supporters: Its equipment tends to be less expensive than alternatives from Nokia Oyj and Ericsson AB and is often higher quality. The company has won 5G customers in Russia, the Middle East and Southeast Asia, including the Philippines and Thailand. In Malaysia, the prime minister has trumpeted the advantages of Huawei’s gear, saying his country will use “as much as possible.”

Some U.S. allies have balked at shutting Huawei out completely from 5G network construction. U.K. intelligence agencies reportedly argued that Huawei is a manageable risk, but a political decision has been delayed until 2020. Norway decided against a ban, leaving the choice to individual companies; so far two have gone with Ericsson. French President Emmanuel Macron says his country is looking to balance the need for “good technology and to preserve our national security.” In Germany, Merkel faces a similar dilemma, but is facing a potential revolt by lawmakers who want to effectively ban Huawei equipment. China’s ambassador to Germany threatened Berlin with retaliation if such a ban were adopted, citing the millions of vehicles German carmakers sell in China.

The U.S. has moved to curb Huawei’s ability to sell equipment in the U.S. and, more significantly, to buy parts from U.S. suppliers, by adding Huawei to a Commerce Department blacklist. But it’s also granted temporary reprieves that allow U.S. companies to continue to sell parts to Huawei. Microsoft Corp., for instance, said it got a license to sell “mass-market software” to Huawei. The U.S. Federal Communications Commission voted to prohibit the use of federal subsidies to buy telecommunications equipment made by Huawei and ZTE and said it would consider requiring carriers now using the products to remove them. Meanwhile, in December 2018 Canada, at the request of the U.S., arrested Huawei’s chief financial officer, Meng Wanzhou, who’s also the daughter of the company’s founder, Ren Zhengfei. The U.S. is seeking her extradition as part of a criminal case alleging that she conspired to defraud banks into unwittingly clearing transactions linked to Iran in violation of U.S. sanctions. Both Meng, who is also deputy chairwoman, and the company have denied wrongdoing.

7. Who else has accused Huawei?

It has repeatedly denied that it helps Beijing spy on other governments or companies. The company, which says it’s owned by Ren as well as its employees through a union, has in recent years begun releasing financial results, spent more on marketing and engaged foreign media in an effort to boost transparency. The formerly reclusive Ren has become more outspoken as he fights to save his company from numerous challenges. While he said he was proud of his military career and Communist Party membership, he rejected suggestions he was doing Beijing’s bidding or that Huawei handed over customer information. In March, Huawei went on the offensive, filing a lawsuit in federal court against a statute that blocks U.S. government agencies from using its equipment. Ren once predicted the Trump administration’s move could knock $30 billion off his company’s revenue. That estimate was later trimmed to “less than $10 billion.”

Yes. In October, the Trump administration placed eight other Chinese tech giants on its blacklist, accusing them of being implicated in human rights violations against minority Muslims in the country’s Xinjiang region. They included Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co., which by some accounts control as much as a third of the global market for video surveillance; SenseTime Group Ltd., the world’s most valuable artificial intelligence startup; and fellow AI giant Megvii Technology Ltd. ZTE almost collapsed after the U.S. Commerce Department banned it for three months in 2018 from buying American technology. The U.S. Justice Department has charged state-owned Fujian Jinhua Integrated Circuit Co., its Taiwanese partner and three individuals with conspiring to steal trade secrets from Micron Technology Inc. – The Washington Post