In the last five years, the Belt and Road Initiative (BRI) have forged the association between China and infrastructure in the global imaginary, and with good reason. With over one-thousand infrastructural projects concluded in over sixty countries, China’s $900 billion project involves 62 percent of the global population. However, Huawei Technologies Co., Ltd. – one of China’s flagship companies worldwide – forged yet another association between China and infrastructure, which promises to be far more extensive as well as divisive.
Huawei provides information and communication technologies (ICT) to more than 3 billion people worldwide. It counts over 180,000 employees in over 170 countries, and produces an annual revenue that rose up to $108.5 billion in 2018. Huawei is a frontrunner in 5G infrastructures, which the company recently started constructing around the world. 5G infrastructures make up of very-high-speed networks, employed for mobile communication, digital connections and the digitalization of public structures. In the run to 5G technology, China de facto surpassed the United States.
As confirmed to ISPI by a source close to Huawei Italy who prefers to stay unnamed, the US-China technology race is the element that aroused suspicions among political leaders worldwide as to the cybersecurity hazard carried by Huawei hardware. Indeed, the differences of opinion on the role of new-generation digital technologies among EU countries have a geopolitical character, which is bigger than Huawei and Huawei finds itself crushed between US-China antagonisms.
Accusations from the US fly around the safety of the hardware produced by Huawei, which is potentially at risk of being manipulated by the Chinese government. On February 21, US Secretary of State Mike Pompeo came as far as to declare that the US may not be able to work with allies that use Huawei equipment in their 5G networks. In its allegations, the US makes reference to China’s Constitution as well as to China’s Company Law. In fact, both laws require the formation of party organizations in private companies with the ostensible aim of making sure that companies comply with the law and supervise groups such as trade unions and the Communist Youth League. The potential of party groups is that they might influence corporate decision-making. Moreover, the provisions contained in China’s Counterespionage Law, Anti-Terrorism Law, Cyber Security Law, National Intelligence Law and State Security Law raise the issue that the Chinese government might be authorised to ask telecommunication providers to plant backdoors, eavesdropping devices or spyware in their equipment. China’s Counterespionage Law has not been overlooked by Huawei. In fact, the company does not belong to the category of telecommunication providers cited by the Law, as it is a vendor and a manufacturer. The legal opinions presented by Huawei before the Federal Communication Commission in May 2018 – our source continued – show that Huawei’s overseas subsidiaries, the agencies currently under the spotlight, are not legally bound to comply with requests from China’s government authorities.
However, no ban on Huawei hardware was introduced in any EU country, although US allies have been pressured to limit the company’s 5G infrastructures. In December 2018, the German Federal Office for Information Security (BSI) adopted “an innocent until proven guilty” approach towards the company. Indeed, the BSI announced that hardware from Huawei would not have been banned unless hard evidence of espionage had been presented. Nonetheless, Germany has asked for guarantees to participate in the 5G auction that will take place in March. At the same time, the German Chancellor Angela Merkel reiterated the fear of governments worldwide that the company might pass sensitive data to the Chinese government. However, on 27 February, Merkel took a step in the direction of a distension of the relations between Germany and Huawei by exploring the possibility of directly working with China on a ‘no-spying’ deal, thus removing Huawei from the crossfire.
What is clear is that the approach towards Huawei is fragmented. While, at first, Australia and New Zealand both seemed to go in the direction of blocking access to Huawei’s 5G technology and Japan suspended acquisitions from Huawei for its public companies, New Zealand has recently reconsidered its position, and is now holding the door open for Huawei. From its part, the EU have adopted a law that requires the screening of all FDIs that might endanger security. Italy is in countertendency as the country has opened its networks to Huawei, as offered products at competitive costs.
Despite increasing speculations, evidence mainly points to the fact that a multinational telecommunication company, whose headquarters are located in a non-democratic country, is building infrastructures worldwide to offer a new technology that is bound revolutionize everyday life. Huawei places China at the edge in the tech race with the US: in practice, controversies are solely aroused by the ‘vagueness’ of China’s legislation, which is the real source of the increasing concerns of foreign stakeholders.
Huawei has been working hard to appease concerns with a series of public relations initiatives that mainly involve the figure of the company’s CEO, Ren Zhengfei (任正非). Although the political background of Ren (who is a member of the Chinese Communist Party and a former officer of the People’s Liberation Army) raises additional disquiets about the company’s ties to the Chinese government, his actually is a common resume for someone, like Ren, who has fully experienced the consolidation of Communist power in China.
Moreover, Huawei has launched a cybersecurity centre in Brussels on March 5, in addition to those already operating in Germany and in the UK. All centres seek to open a dialogue between the company and its partners as well as with clients, state governments and international institutions through a wide range of activities, including cybersecurity classes. However, the core aim is to make Huawei more approachable to its stakeholders. In the specific case of Italy, Huawei Italia adopts the same line, although the company has been greeted with open arms, thus facing fewer concerns from the Italian government. In any case, Huawei welcomes a review of its technology and the introduction of a safety certification on its products.
Although Huawei has been working extensively to provide its stakeholders with the highest levels of transparency – as Huawei’s Rotating Chairman Guo Ping reiteratedas recently as during the Mobile World Congress in Barcelona on February 26 – the question remains on whether concerns should be appeased by the efforts of the company alone, or whether Germany’s example should not snowball into a series of bilateral or multilateral dialoguesbetween China and concerned countries.
Above all, Italy should be especially involved with this international conundrum, as Huawei has been a stronghold in the Italian market for fifteen years. The company has 850 employees in Italy, 85% of whom are local. In 2017, Huawei generated a spin-off revenue of about 220 million euros. The company is undoubtedly a key stakeholder for Italy that, among others, provided the country with an LTE system to facilitate rescue operations during the Rigopiano avalanche in 2017.
While concerns over Huawei’s 5G technologies continue to shake public opinion, one wonders whether discussions should spur investigations on the company or rather centre on the establishment of bilateral or multilateral dialogues with the Chinese government and interested parties.