Huawei, a tool of the Chinese Communist Party, is no fit partner for the UK

Boris Johnson and his government have snubbed the country’s greatest ally, the United States, and decided to allow the Chinese telecoms equipment giant, Huawei, to play a part in the UK’s 5G network.

The United States insists that it would be “madness” to incorporate Huawei equipment into the UK network. Washington has indicated it will curtail allied intelligence sharing if London goes ahead despite American entreaties.

Britain has been under tremendous pressure from the American government, including calls from President Trump, to ban Huawei from building the UK’s 5G communications network. It is part of his larger battle over Huawei, in which the US orchestrated Canada’s arrest of the company’s CFO Ms Meng Wanzhou (pictured) on fraud and Iran sanctions-breaking allegations a year ago.

Despite Johnson’s claim that Huawei will not be allowed into “sensitive parts”, or the so-called core of the network, and will only be allowed to account for 35 per cent of the kit in a network’s periphery, critics remain sceptical. The move flies in the face of the Five Eyes alliance of the US, UK, Australia, Canada and New Zealand. The US and Australia have already banned Huawei from their 5G networks.

Tom Tugendhat, a leading frontbench Tory MP, denounced the UK decision in Parliament the day before it was announced. He expressed the concern of many about “nesting that dragon, the idea that we should be letting the fox into the hen house, when really we should be guarding the wire”.

Flying into London to meet Johnson a day after the announcement, Secretary of State Mike Pompeo urged the UK to think again. He said Britain had a chance to “relook” at the decision, stressing that the US needed to be sure its allies had “trusted” information networks. 

While the Johnson cabinet has claimed it can ring-fence any security issues, and Huawei has claimed it does not and will not collaborate with China’s Communist Party dictatorship, few appear convinced this is so. 

Why are they worried?

Huawei has loudly trumpeted that it is a “private company” and not an arm of the Chinese state. This is untrue. The Chinese state and the Communist Party loom large over it. 

Its ownership and control is clearly reflected in corporate and legal records and has been confirmed by Huawei personnel, says Chris Balding, a business professor who taught at the HSBC Business School in Beijing. Professor Balding summarised the structure very neatly in a recent report.

Indeed, Huawei’s structure is like many that I examined during 15 years performing due diligence services for international clients on Chinese corporate entities. It is clear that, in effect, it is a state-owned structure under the control of the Chinese Communist Party. Its owner is the Huawei Investment Holdings Trade Union Committee which, like all trade union committees in China, is a so-called “mass organisation”.

The trade union committee is under the party-controlled All China Federation of Trade Unions (ACFTU), whose staff are civil servants serving Party and government interests. The head of the ACFTU, which ultimately owns the controlling stake in Huawei, is a Vice Chairman of the Standing Committee of the National People’s Congress. This is China’s party-controlled “parliament”, which meets once a year to endorse decisions and new laws issued by the Party apparatus in a ceremony of parliamentary window-dressing.

Regardless of the ownership model, the party has anyway always imposed its oversight in all large Chinese companies, ensuring that they faithfully execute Party instructions, make all their staff study “Xi Jinping Thought,” and provide access to data for public officials. “In other words, Huawei is not a private company and the CCP has directed all companies to follow the Party,” said Balding.

Another key question is whether Huawei works with the Chinese security and intelligence apparatus. In fact, Huawei has a long history of intimate relations with Chinese security and intelligence. Its founder (and Ms Meng’s father) Mr Ren Zhengfei was a senior officer of the People’s Liberation Army (PLA). As many as 10 per cent or more of Huawei personnel have military or intelligence backgrounds. Its Chief Legal Officer even received his PhD in electronics from a PLA university, where many other executives and personnel also got their degrees. 

Chinese law is very clear that Chinese firms must obey intelligence and information gathering requests made by government officials. The law grants the state access to all data held by Chinese firms (and foreign firms operating in China) at all times. Despite Huawei claiming that it would rebuff such requests, Chinese law requires Huawei network managers to harvest and hand over data when ordered to do so.

Since Huawei’s genesis in the 1990s, the Chinese State has supported Huawei with soft loans for development, research grants, customer finance, reported to amount to over $75 billion, and invitations to form joint businesses with Chinese telecoms carriers and local governments on sweetheart terms. Huawei has also been involved in partnerships with PLA universities to pursue research on networks, encryption, wifi and 5G.

The company has been caught and sued in America for stealing intellectual property and technical data from competitors. Huawei maintains extensive databases on foreign individuals and companies, including data that should not be in its databases at all, according to Balding. 

UK and Czech cyber evaluation centres have concluded that Huawei network products contain security threats. “Huawei devices quantitatively pose a high risk to their users. In virtually all categories we studied, we found Huawei devices to be less secure than comparable devices from other vendors,” their report states. “We discovered there were hundreds of cases of potential backdoor vulnerabilities,” it said. 

Apart from working for the Chinese State to build data and surveillance networks, Huawei has also assisted the governments of other authoritarian states, such as Iran and North Korea, to build mobile networks and a repressive surveillance and censoring service. In this area, it is fair to say that Huawei is additionally involved in the suppression of human rights, for example through involvement in Xinjiang in the remote northwest of China, where Muslim Uighur people are routinely abused and oppressed. Balding notes that Huawei has helped develop facial recognition surveillance and population monitoring technologies in the region.

Even Chinese people have no love for Huawei. In recent months, the company received a torrent of social media abuse from Chinese netizens over sweatshop labour practices and the victimisation of plaintiffs complaining of abuse as its employees. And Ms Meng is widely disdained by Chinese as an over-entitled “red princess”.

All in all, this company is no suitable partner for a free and open society under democracy and the rule of law. The UK, like other such countries, is well known to be a target of the Chinese Communist Party’s global espionage and influence campaign. Huawei is part of its drive to overturn the current world order.