Chinese telecoms giants are taking over the world. Should we be scared? (McClenaghan)

Maeve McClenaghan writes at the Bureau of Investigative Journalism:|

Huawei is not yet a household name in the UK – for one thing, there is confusion over how to pronounce it – but the Chinese telecommunications giant is spreading its reach around the world. But accompanying its global expansion are worrying whispers of covert surveillance and espionage.

This year Huawei’s revenues overtook that of its competitor Ericsson, making it the world’s largest supplier of telecoms equipment. The Economist sets out to chart the rise of the behemoth, and explores the myths surrounding the beast.

It’s not hard to see where concerns come from. The company has close links to the government, the Economist explains, and founder Ren Zhengfei served in the People’s Liberation Army (PLA) engineering corps. According to the article, some critics of the telecommunications company worry that the technology is being used as a Trojan horse, with technological ‘backdoors’ to allow China’s spooks to eavesdrop.

Even more dramatic is the suggestion that the technology could contain ‘kill switches’, allowing China to disable any Huawei system in the event of conflict.

Such worries are not just the domain of conspiracy theorists. In India the company has been called a threat to security. Meanwhile in the US the House of Representatives intelligence committee has taken a keen interest in the company, and government opposition has thwarted attempted buy-outs of US firms by the Chinese company.

One former member of the joint chiefs of staff tells the Economist: ‘We’d be crazy to let Huawei on our networks, just crazy.’

But the Economist finds no solid evidence that such practices are going on. Indeed, the article notes, western companies are not scared of cosying up to government. A 2008 investigation by Wired found Cisco boasting to the Chinese government of its technology’s surveillance potential in cracking down on falun gong members.

And earlier this year CNet reported the FBI has proposed forcing internet companies to build backdoors allowing it to monitor social networks and online conversations. The Economist adds that American officials have also called for the installation of ‘backdoors’ in some US exports, allowing covert access to exported technologies.

To what extent, then, is this a case of sour grapes? Huawei is the new kid on the block and is already taking over the neighbourhood. It has won government contracts in Canada and New Zealand and dominates the market in Africa, where it undercut Ericsson and Nokia by 5% to 15%.

This market competitiveness may be due, in part, to subsidies from the Chinese government. Last year Huawei admitted its customers benefited from access to $30bn (£19.3bn) in potential ‘export financing’, although how much of that was used is unclear. Chinese and European officials have apparently met to try to negotiate an avoidance of a war over subsidies.

In the UK, the company is regulated by the ‘Cyber Security Evaluation Centre’, set up by Huawei and curiously located in Banbury. The centre works in collaboration with GCHQ to test networking equipment and software that will be sold in the UK. Such tests are seemingly welcomed by the company. ‘Believe no one and check everything,’ Huawei’s global cyber-security officer John Suffolk tells the Economist.

Is this enough to reassure us? The Economist article certainly sows seeds of doubt – its cover shows Huawei mobile phones towering over a cityscape, imprinted with Chinese flags and huge all-seeing eyes.

But the article doesn’t prove the company is the Orwellian monster suggested. Instead, we are shown a company playing – and winning – in the global markets. Of course the potential of such technological permeation is worrying, but without evidence of wrongdoing we cannot be sure if the monster is a legitimate threat or another imagined boogey-man under the bed.

Read the Economist’s article ‘Huawei: the company that spooked the world’ here.

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Mirrored from The Bureau of Investigative Journalism

Posted in Uncategorized | 12 Responses | Print |

12 Responses

  1. Dear Professor Cole

    One does wonder if people are worried about the Chinese doing to them what they have been doing to the rest of the world for years.

    If you are not aware of the Crypto AG exploit it is a good place to start.

    link to schneier.com

    Selling encryption engines to embassies all over the world with a very good encryption algorithm, but transmitting the decryption key in the first package of each message must have caused many a laugh.

    Your readers might of course enjoy a well written and well researched up to date papers on Chinese Cyber Espionage and Economic Warfare from the Brits.

    link to cityforum.co.uk

  2. Most of the people in the world who have internet access have that access only through smart phones. Providing Africans with cheap smart phones is a good thing.
    There is the possibility of governments monitoring conversations. The US does it, so why shouldn’t China. But, how are the spys going to monitor and analyze 60 trillion conversations? The g-men are the ones who will be driven batty. And the counter-spies will figure out how to use the technology against the g-men (like Wikileaks did).

  3. I have so far been impressed with the Bureau of Investigative Reporting, however, this was not their best product. (And I’ve had some substandard days lately too, however times are getting awfully warm to allow complacency or excuses.) Simply copying an Economist article, which like 98% of Economist articles ends with a “maybe good, maybe bad” is not quite enough.

    Some questions for someone who has the time to really investigate. What has been Huawei’s role in domestic surveillance and repression? Does anyone know anything about that? What has been their role in Tibet, say, or how’s their attitude about routing calls between Russia and Vietnam, or Japan to Burma, any evidence of Chinese state skullduggery there? How have they acted in Canada, have they hired Canadians, have they changed policies in any way, is there any evidence of Chinese “black ops” capability or action? IS the phone service better for Canadians? I’d love to hear the results of a deep investigation, in due time, wish I was younger and more free to do it myself.

  4. There are two worrying sides to this; spying and the remote kill switch. Two different things.

    The spying can be countered (imperfectly) by using encryption and shadow networks like Tor.

    On the kill switch; isn’t the US government looking into that for American networks? Perhaps it is already there. The solution seems to be (imperfectly again) open source code and hardware.

    • We’ve known that the iPhone has a “kill switch” for four years (link to news.cnet.com). AFAIK it hasn’t been confirmed that phone can actually be remotely disabled – and it won’t be until and if Apple actually uses it, but given Apple’s obsessive control of the device it’s possible and even probable. To the best of my knowledge Apple has never explicitly denied that such a capability could exist.

      So why the sudden alarm that a Chinese made device could have a similar “feature”?

  5. On the pronunciation of pinyin Chinese words: Go to

    link to chinesepod.com

    where they have downloadable apps that will pronounce each syllable for you. It won’t get you the tones (for that you need the characters) but unless you know Chinese anyway, the tones won’t make any difference to you. The WikiPedia article seems confused about the tones, giving different tones in different parts of the article (and, it seems, wrong tones in 3 out of four cases).

    link to en.wikipedia.org

    as reported by pasting the characters into my favorite online Chinese dictionary:

    link to mdbg.net

    • P.S. I note that the Chinese dictionary also has a pronunciation tool, that can ge accessed by clicking on the >> icon next to the characters and mousing over to the “speaker” icon.

    • The Chinese dictionary website even knows the company by name. You can get the characters and the pronunciation by typing the pinyin ‘huawei’ into the box. There are two results, one of which is the company name.

  6. Now let me get this straight,the hundred year old Red under
    my bed has a bugged phone for me….Holy Feces!

  7. Rules of globalized ‘free’ trade agreements giving rights to companies, international companies to either demand the selling of their product or for lowest common denominator on things like environmental impact rules, like with coal extraction or pollution from something like cement kilns and low wage effects -or nations simply have to essentially withdraw from the globalized world of commerce. This is already China’s wedge or choke hold to push the back door. But it isn’t only one nation pushing the wedge to gain control. International Corporate an big finance in power now largely without checks on its power since derivative globalization or isolation of risk. – since the sanctity of property rights was given the green light -gave contract law essentially power to require countries to essentially withdraw from the ‘free’ market, now globalized, or to submit. What this means is that until it’s too late or essentially game over with one company taking all by the sudden realizing of embedded tendrils o firm control on the control; that it is illegal to interfere with ‘free’ commerce and trade..
    However this is not happening in an immortal world, a world in simple terms where resources are plentiful and ecosystem can’t be destroyed. That has been driven to the wall or point of breaking in no uncertain terms as evidenced by fact heat is rising fast planet wide along with indications of an inescapable perfect storm.. Now is time to call out the gangsters who think they have taken control. There is movement afoot for the betterment of government worldwide and for fairness and respect for the little guys.. -If the internet can be kept open and used to make change happen so runaway heat and ecosystem Earth can maintain life fostered by tapping writ of law known as Act of God to alter current contract law. It may be possible -To set the framework in which good business naturally prospers and zeros in on stopping rise of entropy or disorder/heat and loss of Earth, our home. So Peace is not sound of silent sand, shifting sand without an ear to hear.. Says the silent sand to the lad at hand as if someone speaking.. Shifting sand..

  8. I find this article the opposite of ‘investigative journalism’.

    First, it makes a lot of accusations without backup, then goes on to even admit that! It’s main (if not only) SECONDARY source of information is the “Economist”. I don’t call myself an investigative journalist because I can read and interpret the “Economist”. Why should this writer?

    Second, it feeds directly into the China bashing meme so popular with American business and political elites these days. At least one reader got it right: isn’t the US doing the same things as it prepares for an era of cyber war that none of us really know about or understand?

    All in all, it reads like those insidious NYTimes ‘fishing’ articles that say nothing but invite others to fill in all hte blank spaces their own reporters couldn’t. Some that stood out were in the early days of the Cordoba Temple ‘controversey’, the Turkish Flotilla, and John McCain’s lobbyist ‘mistress’. If there is nothing to report, don’t sqeeze juice from a lemon.

  9. Twenty years ago a saavy computer acquaintance said that the internet would destroy all national boundaries by making their economic borders permeable and unmanageable. History has shown that to to be true. The transfer of the very large amounts of national currency assets, as opposed to smaller transactions still under the thumb of national regulation, outweighs regulated commerce profits wth disproportional economic and political effect. The kabuki of regulatory economic control still plays however, with political infighting as nightly infotainment and voters incessantly reminded that their votes rally do matter in controlling asset flow despite deteriorating family economic health as proof to the contrary.

    The technological leveraging of power concentration has not been limited to currency flow however, and control of communications has been speeding ahead of regulatory control capability with no less a performance advantage than the perforation of national economic boundaries. The advantages to consumers of technology advances, like cell phones, are being debauched by greed for advantage and money, and at least on the level of the evening news, all that progress is perfectly legal and, well, simply ordinary business. Removed from its usual descriptive context, however, the trend may also be recognized as the legalization and systemization of corruption. One would think that given the importance of this trend to national security, the Department of Homeland Security would have a branch dealing with corruption or systemic manipulation. But that would present some very vexing profiling difficulties. Unless they looked Chinese.

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