Shortcuts / 13 January 2020


It’s the Chinese tech company that’s been banned from rolling out 5G networks here in Australia, in NZ and in the US. Here we step through what the concern is, how it plays into broader diplomatic tensions between China and the West and what Huawei has to say.

What is Huawei?
Huawei (pronounced “wah-way”) is a Chinese multinational tech company that is the world’s largest manufacturer of telecommunications equipment and the world’s second biggest manufacturer of smartphones, after Samsung and ahead of Apple. 

How big is it and where does it operate?
With its headquarters in Shenzhen, Guangdong, Huawei operates in over 170 countries. The company has about 194,000 employees and last year recorded revenue of ¥850 billion (AU$176 billion). 

How deeply is it connected to the Chinese Government?
Huawei founder Ren Zhengfei has ties to the Chinese Communist Party, having been former engineer in the People’s Liberation Army, the armed forces of the Chinese government. While Huawei downplays its ties to the government, the CIA said it has evidence indicating the contrary. A report by The Times revealed “American intelligence shown to Britain says that Huawei has taken money from the People’s Liberation Army, China’s National Security Commission and a third branch of the Chinese state intelligence network.” 

Why is it in the news?
After the CIA shared its concerns with its ‘Five Eyes’ intelligence allies Australia, New Zealand, Canada and the UK in early 2019, these nations (with the exception of the UK and Canada, who are still sitting on the fence) banned Huawei from rolling out 5G networks. In 2018, the Trump administration banned Huawei and ZTE technologies from being used by the US federal government, citing national security concerns. Then in 2019, the US effectively banned US companies from doing business with Huawei without government approval. The company also made news in late 2018 after Huawei’s CFO (and founder Ren Zhengfei’s daughter) Meng Wanzhou was arrested in Canada at the request of the US. She has since been released on bail and is due to attend an extradition hearing on January 20 this year. 

So to start with, what is 5G?
Most of us would be familiar with 3G or 4G networks. But 5G, or fifth generation, is the next generation of wireless internet that boasts internet speeds that are 10 to 20 times faster than its predecessors. For the first time, the 5G network is expected to power many new technologies including self-driving cars, robots and even smart cities and homes, providing a new level of connectivity and helping aid the spread of new technologies. 

What is the concern about Huawei’s participation in the rollout of telco infrastructure?
There are concerns the Communist Party’s influence on Huawei means that the Chinese Government could potentially use ‘backdoors’ in Huawei’s technological infrastructure to spy on individuals and companies around the world. And because Huawei produces a wide range of products from undersea cables to AI devices, it has access to a huge amount of data. When it comes to 5G technology, surveillance capabilities could potentially do anything from tracking autonomous vehicles to shutting down power grids.

The US has previously said it could limit its intelligence sharing with nations using Huawei technology due to risks to national security. This is why the UK and Canada are facing pressure from the US to ban Huawei from its 5G networks, as it is part of the ‘Five Eyes’ intelligence sharing network with the US, Australia, New Zealand and Canada. 

Who else has banned Huawei and why?
Other countries that have banned Huawei equipment include Japan and Taiwan. While not implementing a full ban, Germany and France are increasing security measures to safeguard against the ‘backdoors’ into telecommunication infrastructure. While the UK is still yet to reach a decision on whether it will ban Huawei outright, it has proposed a ban on Huawei products for ‘core’ parts of it’s 5G network. 

What else has Huawei been banned from?
In 2018, citing national security concerns, Australia agreed to fund the construction of an undersea cable to bring high-speed internet to the Solomon Islands and Papua New Guinea after the two island nations initially made a deal with Huawei. And back in 2012, Huawei was banned from supplying technology to Australia’s National Broadband Network (NBN) due to national security concerns.

The arrest of their chief financial officer – who is she and what is she accused of?
In December 2018, Huawei CFO Meng Wanzhou – who is the daughter of Huawei founder Ren Zhengfei – was arrested in Canada while in transit at the request of the US on allegations that the company had violated UN, US and EU sanctions placed on Iran after being linked to a plan to sell restricted telecom equipment to the country. China and Huawei argue that the arrest was politically motivated, rather than based in 

What has China said?
After Meng’s arrest, the Chinese embassy in Canada released a statement opposing the arrest and demanded her release, claiming she had not violated any Canadian or US laws. Both Huawei and China claim Meng’s arrest was politically and economically motivated, and that she was unlawfully held, searched and interrogated by Canadian authorities acting on behalf of the FBI.  

There’s a suggestion Huawei’s simply a victim of the US-China trade war. Is that the case?
It’s not quite so simple. While as a competitor, Huawei threatens the profits of US tech companies, and there is certainly a “tech war” raging between the US and China when it comes to the race to develop new technologies like 5G, at the same time, the Huawei issue is also based on legitimate concerns from US intelligence agencies about the nature of the relationship between Huawei and the Chinese government, and its potential threat to US national security. As The Daily podcast’s David Sanger explains, “Whoever dominates these fifth-generation networks will have an economic intelligence and military edge for decades to come…Because in future conflicts, the war starts not with nuclear weapons, not with artillery. It starts with unplugging a country — their electricity. And it starts, of course, with their communication networks.” So while there is likely an economic element to the America’s attempt to halt the spread of Huawei technologies, experts say there is also an element of national security at play. 

Squiz Recommends:
Quartz –  Huawei’s Journey to Becoming Us tech enemy No 1” 

The New York Times’ The Daily podcast – “Why Controlling 5G Could Mean Controlling the World”

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