Five reasons why the US case against Huawei doesn't add up

  • 30 Jan 2019

The Chinese tech company faces multiple accusations, ranging from espionage to being an arm of the Chinese military. But do any of these allegations hold up?

Huawei aims to become a leader in 5G equipment provider as at least half a dozen countries gear up to roll out high-speed wireless internet. ( AP )

Huawei, the privately-owned Chinese telecommunications giant, has been slammed with multiple legal cases in the United States. 

The Zhejiang-based company is the world’s largest supplier of telecoms equipment, products that form the backbone of wireless networks. 

In recent months, it has been singled out and banned from participating in contracts for 5G networks in a number of countries as American and European officials suspect that Chinese authorities can use the Huawei equipment to spy on them. 

Ren Zhengfei, the low-profile, 74-year-old founder of the company, has been  the target of a relentless smear campaign focussed on his service in China’s military. 

Among other things, the US accuses Huawei of violating its sanctions on Iran. The company’s Chief Financial Officer and Zhengfei’s daughter, Meng Wanzhou, faces charges in one such case. 

All of this has painted Huawei as a rogue corporate behemoth. Here's a quick look at the controversy.

Richard Yu, CEO of the Huawei consumer business group speaks as he unveils the wireless router running with 5G modem Balong 5000 chipset in Beijing, on January 24, 2019.(AP)

Has Huawei ever spied on other countries?


Despite the concerns that pervade Huawei's unceasing expansion, no one has proved that its equipment has been misused by Chinese authorities. 

It is true that some of the cyber attacks on Western companies and institutions originated from China, but Huawei hasn’t been part of any of them. 

A few weeks ago, Poland arrested a Huawei executive on espionage charges. The story went viral, but Polish officials maintained the alleged criminal conduct of the detained employee had nothing to do with the company's policy.

That didn’t stop Karol Okonski, Poland’s cybersecurity chief, from saying the arrest could provide grounds for banning the use of Huawei’s products in government institutions. 

TRT World asked Okonski to explain if Huawei’s equipment, applications and processes were used to steal personal or public information. 

His office said he was too busy to give interviews. 

A European Commission spokesman also avoided answering the question when asked why the Chinese company was being singled out when no allegation has yet been proven? 

Which brings us to another question. 

Can electronic equipment be spy-proof? 

That’s very unlikely.

A little over a year ago, Olav Lysne’s book The Huawei and Snowden Questions was published. Lysne, a Norwegian professor of technology, argued that it’s almost impossible to audit electronic equipment.

"Even if someone chose to give me one million years and as much funds as I can possibly want, I will still not be able to prove that phone is not working against my will," he told TRT World in an interview last month. 

That’s because modern electronic gadgets come with complex integrated systems, countless transistors and algorithms.

This also allows security agencies to manipulate the equipment to spy on foes - and sometimes their own people as America’s National Security Agency was revealed to be doing in 2013. 

The NSA used internet routers manufactured by San Jose-based Cisco Systems to transmit data back to them, documents leaked by whistleblower Edward Snowden showed. 

Chinese companies have also indulged in similar breaches. In November 2016, a US-based cybersecurity company, Kryptowire, found that personal information from millions of Android devices was being sent to a server in China. 

 When it comes to Chinese companies, US and European officials have often raised concern about the involvement of the government.

And that’s where Zhengfei’s past comes into question. 

Was Zhengfei was part of the Chinese military?

Yes he was.  

Zhengfei served in the People’s Liberation Army’s Engineering Corps as a technician between 1974 and 1984.  It remains uncertain how important a role he played as an engineer during his career. 

What is known for sure is that he had made a name for himself even before he founded Huawei in 1987. In 1982, he was one of the delegates at the 12th National Congress of the Communist Party of China.

Ren Zhengfei, founder and CEO of Huawei, says aid the tech giant would reject requests from the Chinese government to disclose confidential information about its customers.(AP)

Many Chinese companies, especially those which have come to dominate the telecoms, high-speed rail and power sectors, are state-owned enterprises. 

ZTE, another telecoms giant, is owned by the government through subsidiaries.

But Huawei was always privately owned. Zhengfei, along with a few friends, founded Huawei Technologies in the mid-1980s as a company that bought and sold telephone exchange switches. 

Who wins when Huawei loses out? 

Huawei leads the world in the network equipment market. But its 28 percent share of the market, according to Bloomberg, is only slightly ahead of Sweden’s Ericsson and Finland’s Nokia. 

 A number of countries are looking to roll out 5G networks in the coming years. However, Huawei is already blocked from the US, where Samsung has been grabbing the market share there by striking deals with mobile carriers. 

The move could dent China’s ambition to become a leader in hi-tech equipment market instead of being labelled as only an assembler of the products. 

Is the US deliberately targeting Huawei? 

Meng Wanzhou, Huawei’s CFO and Zhengei’s daughter, was arrested in Canada in early December, 2018. She faces charges of helping her company violate US sanctions on Iran. 

She faces extradition to the US and a possible jail term. 

Huawei isn’t the first company to face US censure for violating its sanctions on the Islamic Republic. 

“A number of financial institutions, including JP Morgan, Bank of America, Wells Fargo and international banks, were all judged guilty and paid enormous fines for violating sanctions in the last several years,” noted Stephen Roach, a Senior Fellow at Yale University, in a recent interview with CNBC. 

He added: "None of their executives, of course, went to jail - why is Huawei being singled out for the sanctions violations?"