Huawei is a multinational company which has become the world’s largest supplier of telecommunication network equipment and second-largest smartphone producer coming trailing only Samsung. In 2018, Huawei reported a 21% increase in revenue growth compared to the previous year, surpassing $100 billion for the first time. Huawei has become a market leader in many countries across Africa, Asia and Europe, deploying its products and services in over 170 countries and its networks reaching over 1/3rd of the world’s population. Despite the immense success, Huawei’s path to success has been paved by controversy.
The most recent controversy surrounding the multi-billion-dollar company emerged in December after the arrest of Meng Wanzhou, Huawei’s Chief Financial Officer and daughter to company’s CEO and founder Ren Zhengfei. She was arrested in Canada on suspicion of violating US trade sanctions on Iran and the US has begun the process of trying to extradite her. Chinese officials and Huawei continue to label her arrest as politically motivated and have demanded her swift release.
This arrest adds to the series of blows the multinational company has faced in recent years. US intelligence agencies have alleged that Huawei has links to the Chinese government and that their equipment could contain ‘backdoors’ for spyware. Despite the lack of evidence publicly produced, the US government has taken steps to block the firm from their market. There is a ban on government purchases of Huawei devices and services which effectively prevents government help to any carrier that uses such equipment. This has led to top American service providers such as Verizon Communications and AT&T pulling out of deals with the multinational company to distribute their products. Earlier in 2018, the US Senate Intelligence Committee convened with the heads of major intelligence bodies (FBI, CIA and NSA) warning the American population not to purchase Huawei products for concerns about smartphones becoming spying devices. Political pressure has also been exercised by the government who have made it seemingly impossible to buy Huawei phones in the US as it has no carrier or big-box retail distributer.
The company’s founder and current Chairman, Ren Zhengfei, was formerly an engineer with the Chinese military. Although he downplays his military background to focus on this immense success with his company, concern still plagues foreign governments over his allegiance to the current Chinese government. Despite Huawei and Zhengfei releasing statements that Huawei would refuse if China requested any back-door access to any foreign wireless network, it may not be that simple. Huawei has obtained legal advice saying that it is not obliged to help the Chinese government with gaining information or access to any foreign countries data. However, many countries are not convinced. Australia’s decision to ban Huawei from taking part in the rollout of 5G mobile infrastructure is because they too think that Huawei will:
Justification by the Federal Government for banning Huawei from the 5G network
New Zealand, Britain and the countries in the European Union have either followed suit or share these concerns with the US and Australia.
This all stems from Chinese domestic laws that require all companies to assist the government when required. In effect, if China required Huawei to participate in state espionage, they may have to. Nigel Inkster, a senior advisor at the International Institute of Strategic Studies and a thirty-year veteran with MI6, argues that despite Huawei’s pride and desire to be a private corporation, it must ultimately follow the laws of the Chinese government especially since Huawei’s headquarters remain in Shenzhen.
The rest of the world doesn’t seem to have an issue with the smartphones with countries like Australia even revoking its ban. However, the concern surrounding Huawei now centres on the emergence of fifth-generation mobile networks, a space where Huawei is at the forefront. Numerous countries including Australia and New Zealand have recently banned Huawei from building 5G networks in their respective countries. These government bans on Huawei working on its national broadband network stem from the national security concerns surrounding Huawei. For Huawei, this has effectively blocked Huawei from further competing in these markets against other companies. Some would say this is an effective method of protection while Huawei has argued that with or without them in the 5G rollout, the technology will still be made in China and be linked to other companies such as Apple and Samsung, this ban would only destroy competition.
Despite constantly defending itself and maintaining all security concerns are unfounded, Huawei will have to continue to work in a prism of controversy and suspicion. States have the power and ability to make decisions about its security and therefore it is justified that they take appropriate action against an entity they see as potentially dangerous. For Huawei, they will have to continue to operate in a space where the world considers technology and espionage to profoundly intersect.
